Circular No. 12/1998/TT-TCHQ of December 10, 1998 guiding the implementation of the bonded warehouse regulation issued togetherwith Decision No.212/1998/QD-TTg of November 2, 1998 of The Prime Minister

THE MINISTRY DEPARTMENT OF CUSTOMS
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SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
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No. 12/1998/TT-TCHQ

Hanoi, December 10, 1998

 

CIRCULAR

GUIDING THE IMPLEMENTATION OF THE BONDED WAREHOUSE REGULATION ISSUED TOGETHERWITH DECISION No.212/1998/QD-TTg OF NOVEMBER 2, 1998 OF THE PRIME MINISTER

On November 2, 1998, the Prime Minister signed Decision No.212/1998/QD-TTg to promulgate the Regulation on Bonded Warehouses. Since the Regulations content is already explicit, complete and concrete, the customs authorities and the concerned organizations and individuals shall have to firmly grasp and strictly implement it.

Hereby, the General Department of Customs only provides further guidance on some specific contents as follows:

I. INTERPRETATION OF A NUMBER OF CONTENTS STIPULATED IN THE REGULATION

1. Regarding Article 4 which stipulates the areas where bonded warehouses are permitted to be set up: When a provincial/municipal People’s Committee deems that its locality has enough conditions and a demand for setting up a bonded warehouse, it may submit a document to the Prime Minister and the General Department of Customs. Such a document must clearly and adequately analyze the contents stipulated in Clause 1 of this Article (in which the flow of export and import goods must be figured out). After receiving the document of the provincial/municipal People’s Committee, the General Department of Customs shall conduct the evaluation thereof, then submit it to the Prime Minister for approval or disapproval.

2. Regarding Article 5 which stipulates the setting up of bonded warehouses:

– Vietnamese State enterprises specified in Clause 1.a of this Article shall be construed as State enterprises engaged in business activities, which are established under the Law on State Enterprises adopted on April 20, 1995 by the National Assembly of the Socialist Republic of Vietnam.

The above-said enterprises, besides being staffed with a contingent of cadres who are professionally qualified as mentioned in this Article, must have the function of conducting the export and import goods forwarding and warehousing business.

– Enterprises specified in Clause 2.a of this Article shall be construed as enterprises of all economic sectors, which are established under the provisions of Vietnamese law, have the function of conducting the export and import goods warehousing and forwarding business, and/or supplying imported materials and raw materials for industrial parks.

The stipulation that each industrial park shall be permitted to set up not more than one (01) bonded warehouse in Clause 2.e, Article 5 is clearly interpreted as follows: A bonded warehouse to be set up in a certain industrial park shall be allowed to perform the functions stipulated in this Regulation to serve the enterprises located in such industrial park and those in other industrial parks nearby.

3. The bonded warehouse relocation stipulated in Clause 4, Article 6 shall be understood as the move of a bonded warehouse from a permitted location to another location but still within the area permitted by the Prime Minister.

4. Regarding the procedures for expansion, narrowing or relocation of the sites of bonded warehouses or temporary use of stores and storage yards near the bonded warehouses area as stipulated in Clause 4, Article 6:

a) When one of the above-said needs arises, the bonded warehouse owner shall have to submit to the provincial/municipal customs department that manages such bonded warehouse a dossier set comprising:

– An official dispatch stating the request and concretely justifying the reasons as well as available conditions therefor;

– The site plan of stores and storage yards in the area intended for expansion or relocation, or those for temporary use;

– The valid documents on the right to use stores and storage yards in the area intended for expansion, relocation or those for temporary use;

– In cases of narrowing, only the justification official dispatch and the site plan are required.

b) The responsibilities of the customs authorities:

– Regarding the relocation and temporary use of other stores and storage yards:

The dossier sets therefor shall be submitted to the provincial/municipal Customs Department that manages the bonded warehouses. Within 10 working days after receiving the enterprises dossiers, the provincial/municipal Customs Department shall study such dossiers, conduct the on-spot survey of stores and storage yards and make reports and proposals to the General Department of Customs. Within 10 working days after receiving the dossiers, reports and proposals from the provincial/municipal Customs Department, the General Department of Customs shall reply the enterprises in writing.

– Regarding the expansion or narrowing of bonded warehouses:

The General Department of Customs shall authorize the Director of the provincial/municipal Customs Department managing the bonded warehouses to settle the requests. Within 7 days after receiving the complete dossiers, the provincial/municipal Customs Department shall have to complete the procedures for the expansion or narrowing of such warehouses and report to the General Department of Customs.

5. Package recycling and reinforcement, repackaging, goods maintenance and repair services stipulated in Clause 5, Article 7 shall be construed as follows:

5.1. Recycling is the use of necessary measures (such as sorting, removal of damaged parts, modification…) to restore the quality of goods which was lowered due to transportation or prolonged preservation period or other factors.

5.2. Reinforcing packages: is the use of measures to reinforce packages and wrapping or replace them without changing contents printed thereon.

5.3. Repackaging: is the division of goods from a large package into small packages; putting of many small packages into a large package or putting of unpacked goods into packages, provided that the principal quality, quantity or weight of goods is kept intact.

5.4. Maintenance: is the checking, repair or cleaning of goods.

5.5. Repair of goods: is the application of technical solutions and laborers skills to restore the broken or defective parts of goods, including the replacement or renewal of spare parts, soldering, paint spraying or revamp of goods.

6. Article 8 stipulating the function of bonded warehouse owners in industrial parks is clearly explained as follows:

Besides being entitled to perform services specified in Article 7 of the Regulation, the bonded warehouse owners in industrial parks shall in their capacity as goods owners, be also entitled to tax-free temporary import materials and raw materials to be consigned into bonded warehouses for future supply to production enterprises in such industrial parks. The bonded warehouse owners shall have to fully declare the volume of goods deposited into the warehouse and the volume of goods supplied to enterprises with the bonded warehouse customs authorities.

7. Article 9 stipulates the leasing of bonded warehouses:

7.1. Clause 1, Article 9 stipulating subjects allowed to lease bonded warehouses is explained as follows.

– Foreign enterprises, organizations and individuals mentioned herein are understood as enterprises, organizations and individuals from foreign countries which are operating outside Vietnam.

– Vietnamese enterprises of various economic sectors permitted to conduct export and import business mentioned herein are understood as enterprises permitted to conduct export and import business according to Decree No.57/1998/ND-CP of July 31, 1998.

– Foreign-invested enterprises mentioned herein are understood as joint venture enterprises, enterprises with 100 per cent of foreign capital and parties to business cooperation contracts under the Law on Foreign Investment in Vietnam.

7.2. Bonded warehouse leases:

– For a bonded warehouse lease which is made in a foreign language, the warehouse owner shall have to submit together with such warehouse lease its official translation certified by his/her signature and seal to the customs authority. A warehouse lease certified by signature and seal of the warehouse owner and sent by fax may also be accepted.

– A bonded warehouse lease must be signed between the bonded warehouse owner and the goods owner; but not through an authorized intermediary.

– A warehouse lease must include contents prescribed in Clause 2, Article 9. For goods maintenance and repair services, the warehouse lease must clearly state the maintenance or repair requirements, the quantity of goods to be maintained or repaired, the quantity, and categories of raw materials, materials and spare parts used in the goods maintenance and/or repair services.

– Bonded warehouse owners shall have to take responsibility before Vietnamese law for bonded warehouse leases already signed.

– Warehouse leases may be signed in form of package leases but they must include all contents prescribed in Clause 2, Article 9. In these cases, upon each consignment of goods into the bonded warehouses, the warehouse owner shall have to notify it in writing to the bonded warehouse customs

authority at least 24 hours before the goods arrive at the first border-gate of entry of Vietnam.

– For cases where the bonded warehouses are leased for export goods, the bonded warehouse leases shall be registered at least 8 hours before the warehousing procedures are carried out.

– The time of goods arrival at the first border- gate is the date indicated in the seal of the first border- gates customs authority stamped on the brief declaration of goods carried by transport means.

– The bonded warehouse lease duration stipulated in Clause 3, Article 9 is the period calculated from the date the goods are warehoused to the date they are actually exported out of Vietnam or actually sold in Vietnam.

8. Goods banned from export and/or import specified in Article 10 are those on the list of goods banned from export and/or import, issued together with Decree No.57/1998/ND-CP of July 31, 1998 of the Government and the Governments documents readjusting and/or amending such Decree (if any).

II.THE CUSTOMS PROCEDURES FOR GOODS PUTINTO AND TAKEN OUT OF BONDED WAREHOUSES

1. For goods put into bonded warehouses

1.1. For goods brought from abroad and put into bonded warehouses through border-gates controlled by customs departments of the provinces and cities where bonded warehouses are located.

Within 30 days from the date the goods arrive at the port of discharge, the goods owner or the bonded warehouse owner shall have to carry out the procedures for receiving goods to be warehoused. The dossier to be submitted to the bonded warehouse customs authority shall include:

– The authorization letter for receiving goods (if such authorization has not yet been specified in the bonded warehouse lease): the original or the fax text which, however, must be certified by signature and seal of the bonded warehouse owner.

– The bonded warehouse lease already registered with the customs authority (a photocopy certified by the bonded warehouse owners signature and seal).

– The bill of lading (clearly stating the goods to be put into bonded warehouses).

– The detailed list of goods (particularly for automobiles and motorbikes, the frame and engine numbers must be clearly stated).

– Three copies of the declaration of goods to be put into warehouses (form HQ 8C).

For goods bought overseas by Vietnamese enterprises to be put into the bonded warehouses, besides the documents prescribed above, the copies of the foreign trade contracts shall also be submitted. The bills of lading (B/Ls) must clearly state that the goods are to be put into bonded warehouses, with the specific names and addresses of the bonded warehouses.

After accepting such vouchers, the bonded warehouse customs authority shall register the goods declarations and, together with the goods owners (or their lawful representatives), bring the vouchers already registered at the bonded warehouse customs authority to the customs authority of the goods importing border-gate for comparing them with the actual lots of goods (container serial numbers, seal numbers for goods kept intact in containers, or bale numbers, signs and code numbers for separate goods items); if the actual goods lots are compatible with the declaration, they shall accompany the goods to the bonded warehouses and carry out the procedures for depositing such goods into warehouses, then give their signatures certifying that the goods are actually deposited in the bonded warehouses on the goods declarations. Should any mistake, problem or suspicion arises, a written record thereon must be made with signatures of the representatives of the bonded warehouse owner, bonded warehouse customs authority and border-gate customs authority. The bonded warehouse customs authority shall have to report to its leading officials for settlement of such mistake or problem. Any violation shall, depending on its nature and seriousness, be handled according to the provisions in Article 14 of the Regulation on Bonded Warehouses.

In cases where the goods, which shall be warehoused under a registered valid bonded warehouse lease, but, at the goods owners request, shall be exported to foreign countries through the import border-gate, it is not necessary to transport such goods to the bonded warehouses. Within the prescribed time limit, the goods owner or the bonded warehouse owner shall have to make warehousing and ex-warehousing declarations and warehouse book entries. The bonded warehouse customs authority shall carry out the goods ex-warehousing procedures under the supervision by the border- gate customs authority. In this case, the warehousing declaration shall be inscribed with “Goods not warehoused” and the ex-warehousing declaration with “Goods exported right at the import border-gate”. These shall also be inscribed clearly in the warehouse book.

1.2. For goods in Vietnam to be put into bonded warehouses:

Goods owners wishing to put their goods in Vietnam into bonded warehouses shall have to fully carry out the customs procedures for such export goods lots. After completing the customs procedures at the provincial/municipal customs department, the goods owner shall have to submit to the bonded warehouse customs authority the following documents:

– The bonded warehouse lease already registered with the customs authority (the photocopy certified by the bonded warehouse owners signature and seal).

– The set of vouchers of export goods which have already been cleared front the customs procedures.

– Three copies of the declaration of warehoused goods (form HQ 8C).

The bonded warehouse customs authority shall compare the set of export vouchers, the warehouse lease and the declaration of warehoused goods with the actual goods; if they match, the procedures for depositing goods in the warehouses shall be carried out. In case of mistake or violation, the bonded warehouse customs authority shall base itself on the nature and seriousness of the violation to handle it according to Article 14 of the Regulation on Bonded Warehouses.

2. For goods taken out of bonded warehouse.

2.1. For goods sent overseas through border-gates controlled by the customs departments of the provinces and cities where bonded warehouses are located.

The customs procedures shall comply with the provisions of Clause 1, Article 12 of the Regulation on Bonded Warehouses issued together with Decision No.212/1998/QD-TTg of November 2, 1998. In cases where the goods are retained at the export border- gate where no bonded warehouse is available, such goods shall be kept at places accepted and supervised by the border-gate customs authority.

2.2. For goods imported for sale on Vietnams market

– Goods taken from bonded warehouses for sale on domestic market (including raw materials and materials supplied to enterprises in industrial parks) shall be considered goods imported from foreign countries into Vietnam which shall have to comply with the States policies on taxation and management, import goods as well as on the import of technologies.

– Goods imported from bonded warehouses into domestic market shall have to go through all customs procedures as prescribed for goods imported from foreign countries.

– The bonded warehouse owners shall have to carry out the procedures for taking goods out of bonded warehouses with the bonded warehouse customs authority.

3. Goods imported from foreign countries and put into bonded warehouses or taken from bonded warehouses to foreign countries through border-gates not controlled by customs departments of provinces and cities where the bonded warehouses are located.

The goods owners shall have to file applications to customs departments of provinces and cities where bonded warehouses are located for transport of their goods via the Vietnamese territory to bonded warehouses or from bonded warehouses to foreign countries via the Vietnamese territory. When permitted by the provincial/municipal customs department, the goods owner shall have to submit to the bonded warehouse customs authority the papers and carry out the customs procedures as guided in Points 1.1 and 2.1, Part II of this Circular.

In cases where the goods are taken from bonded warehouses to foreign countries, the border-gate customs officers shall supervise the filling of procedures for transporting goods across the border and sign the three goods declarations certifying the actual export of goods. The border-gate customs authority shall keep one goods declaration and one goods detailed list. One declaration and one detailed list shall be returned to the goods owner, while another dossier set shall be returned by the border-gate customs authority to the bonded warehouse customs authority (where the goods are taken from).

4. For goods transported from one bonded warehouse to another within the Vietnamese territory

The goods owner shall have to file application to the customs department of the province or city where the goods are deposited in a bonded warehouse for transport of such goods within the Vietnamese territory to another bonded warehouse. The customs procedures for taking goods out of a bonded warehouse and those for depositing goods into another bonded warehouse shall comply with the customs procedures for goods deposited in and taken out of bonded warehouses as prescribed in Points 1, 2 and 3, Part II above.

5. The goods, when being transported on the Vietnamese territory into or out of bonded warehouses or from one bonded warehouse to another, must be affixed with customs seals and/or escorted by customs officers. It is prohibited to retain or sell goods on the Vietnamese market during the transportation course. Any incident occurs during the transportation course must be recorded in writing for later handling. The escorting customs officer (if any), the representative of warehouse owner or goods owner and the driver of transport means shall affix their signatures to above-said written record. In case of a serious incident that changes the quantity or quality of the goods not escorted by any customs officer, the warehouse owner and transport means owner shall have to immediately report it to the local administration (commune/ward People’s Committee), so that the latter can witness and join the former in making a record on such incident.

6. The procedures for liquidation of goods deposited in bonded warehouses as prescribed in Clause 3, Article 9:

– When all the conditions prescribed in Clause 3, Article 9 are met, the bonded warehouse owner shall send a written request to the concerned customs authority for liquidation of goods which must be liquidated.

– 3 months before the expiration of a bonded warehouse lease which has already been extended twice, the bonded warehouse owner shall have to request once every month the goods owner to export goods. Past that time limit, if the goods owner fails to re-export goods or reply in writing, the goods shall be considered abandoned and the bonded warehouse owner shall send a written request to the customs for liquidation.

– The procedures for liquidation and the procedures for sale of liquidated goods shall comply with the Ministry of Finance’s regulations.

– The proceeds from the sale of liquidated goods shall be remitted into the State budget, after making deduction for transport freight, warehousing fees and service fee(s) (if any).

7. The procedures for destruction of goods which are broken, damaged, deteriorated or beyond their expiry date:

Basing itself on the written destruction agreement between the goods owner and warehouse owner (or the liquidation boards decision for goods subject to liquidation, or at the bonded warehouse owners request for goods destruction, based on the environmental protection requirement if the damaged or broken goods cause pollution), the bonded warehouse customs authority shall supervise the destruction. In cases where the destruction effects the environment, it must be approved by the local environment management agency.

8. Customs management over bonded warehouses

– Goods and activities in bonded warehouses shall be subject to regular inspection and supervision by the bonded warehouse customs authority.

– The bonded warehouse customs authority and the bonded warehouse owner shall have to open books for monitoring goods deposited into or taken out of bonded warehouses.

– When the bonded warehouse lease expires, the bonded warehouse owner and the goods owner shall have to liquidate the bonded warehouse lease, while the bonded warehouse customs authority shall make comparison and certification.

– Annually, the bonded warehouse owner shall have to organize the settlement and comparison of books with the concerned customs authority and inventory the goods still left in the bonded warehouses under the bonded warehouse customs authority’s supervision.

9. The customs management over the services of package recycling and reinforcement, repackaging, maintenance and repair of goods:

– The services of package recycling and reinforcement, repackaging, maintenance and repair of goods shall be performed by the bonded warehouse owner under the authorization by the goods owner. Such authorization must be stated in the bonded warehouse lease. Newly arising cases shall be permitted through written additional authorization and registered with the bonded warehouse customs authority. Particularly, repair services specified in this Point shall apply only to goods imported from foreign countries into bonded warehouses.

– Before performing the above-said services, the warehouse owner shall have to concretely explain technical measures for performance of such services, which must be approved by leading officials of customs departments of the provinces and cities where the bonded warehouses are situated.

– All materials and spare parts to be used for the performance of the above-said services must be brought from foreign countries, if they are bought on Vietnamese market, the permission from the customs department of the province or city where the bonded warehouses are situated must be obtained and export tax (if any) must be paid according to the Law on Export Tax and Import Tax.

– Storage yards and workshops used for the performance of above-said services must be separated from the goods preserving warehouses. All materials and spare parts to be used for such services shall be supervised and managed by the customs authority.

– The bonded warehouse owner and the bonded warehouse customs authority must have books for monitoring the goods deposited into or taken out; the volumes of materials and spare parts deposited in, the volumes of materials and spare parts used for the repair and those discharged from the goods repair…

– When the bonded warehouse lease expires, the bonded warehouse owner shall have to fill the liquidation procedures with the bonded warehouse customs authority.

– Superfluous materials and spare parts and those discharged from the repair must be returned to the goods owner through all the procedures as for other goods deposited into bonded warehouses.

– It is forbidden to change trademarks and appellations of origin of goods deposited in bonded warehouses.

III. HANDLING OF VIOLATIONS

Acts that violate the provisions of the Regulation on Bonded Warehouses and this guiding Circular shall be handled according to Article 14 of the Regulation on Bonded Warehouses.

IV. ORGANIZATION OF IMPLEMENTATION

1. This Circular replaces Circular No.533/TCHQ of May 26, 1994, Circular No.201/TCHQ-TT of November 6, 1995 and other previous guiding documents of the General Department of Customs concerning this question and takes effect after its signing.

2. The bonded warehouses, which have already been licensed to be set up under the Bonded Warehouse Regulation issued together with Decision No.104/TTg of March 16, 1994 and are currently in operation, shall comply with the Bonded Warehouse Regulation issued together with Decision No.212/1998/QD-TTg of November 2, 1998 and this guiding Circular.

3. The director of the Supervision and Management Department, the heads of the departments and sections of the General Department of Customs, and the directors of the provincial/municipal customs departments shall have to organize the implementation of the Regulation on Bonded Warehouses and this guiding Circular. The bonded warehouse owners and goods owners that lease bonded warehouses shall have to implement these regulations.

4. Any difficulty or problem arising in the course of implementation shall be promptly reported to the General Department of Customs for guidance and instruction.

 

 

FOR THE GENERAL DIRECTOR OF CUSTOMS
DEPUTY GENERAL DIRECTOR

Nguyen Van Cam

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