Decree No. 45/1998/ND-CP of July 01, 1998, stipulating in detail the technology transfer

THE GOVERNMENT
——-

SOCIALIST REPUBLIC OF VIET NAM
Independence – Freedom – Happiness
———-

No. 45/1998/ND-CP

Hanoi, July 01, 1998

 

DECREE

STIPULATING IN DETAIL THE TECHNOLOGY TRANSFER

THE GOVERNMENT

Pursuant to the Law on Organization of the Government of September 30, 1992;
Pursuant to the Civil Code of October 28, 1995;
At the proposal of the Minister of Science, Technology and Environment
,

DECREES:

Chapter I

GENERAL PROVISIONS

Article 1.- Objects and scope of application

1. This Decree stipulates in detail the technology transfer in order to guide the implementation of the provisions of Chapter III, Part VI of the Civil Code adopted on October 28, 1995 by the National Assembly of the Socialist Republic of Vietnam.

2. The technology transfer provisions in the Civil Code and this Decree shall apply to:

a/ The transfer of technologies from abroad into Vietnam;

b/ The transfer of technologies in foreign-invested projects in the form of making capital contribution with the value of the technologies or purchasing technologies on the basis of contracts;

c/ The commercial transfer of domestic technologies between the contracting parties;

d/ The transfer of technologies from Vietnam abroad.

3. The parts on technology transfer in the equipment import contracts or in technology transfer contracts attached to the equipment import contracts shall have to comply with this Decree.

4. The technology transfer within the framework of the international agreements which Vietnam has signed or acceded to and which provide for differently from this Decree, shall comply with such international agreements.

Article 2.- Interpretation of terms

The terms in this Decree are construed as follows:

1. “Technology transfer” is a form of technology purchase and sale on the basis of technology transfer contracts agreed upon under the provisions of law. The sellers shall have the obligation to transfer the comprehensive knowledge on the technology or provide machinery, equipment or provide services and/or training … together with the technological knowledge to the purchaser and the purchasers shall have the obligation to make payment to the sellers for receiving and using such technological knowledge under the conditions agreed upon and stated in the technology transfer contracts.

2. The “transferor” means the “technology transferor” mentioned in the Civil Code.

3. The “transferee” means:

a/ The “technology transferee” mentioned in the Civil Code;

b/ The “transferee of the right to use industrial property objects” mentioned in Article 816 of the Civil Code.

4. The payment price of a technology transfer is the total sum of money to be paid to the transferor throughout the effective term of the contract.

5. “Secrets” are important and confidential technical experiences, knowledge or information accumulated or discovered in the process of research, production or business, capable of creating high-quality services or products yielding high economic efficiency and creating competitive edges on the market.

6. Domestic technology transfer is the transfer of technologies within the territory of Vietnam, except for the transfer across the boundaries of export processing zones.

7. Transfer of technologies from abroad into Vietnam is the transfer of technologies from outside the national boundary or from an export processing zone of Vietnam into the territory of Vietnam.

8. Transfer of technologies from Vietnam abroad is the transfer of technologies from inside the national boundary to outside the national boundary of Vietnam or into an export processing zone.

9. The “net selling price” stipulated for the domestic technology transfer and transfer of technologies from abroad into Vietnam is the total selling price of a product or service during the process of its creation the transferred technology is applied, which is calculated according to the sale invoices minus the following amounts:

a/ The turnover tax, the special consumption tax or the value added tax;

b/ Commercial discount;

c/ Full expenses for the purchase of semi-finished products, details and components from whatever supplying sources;

d/ Expenses for packs, packaging, transportation and advertising.

Semi-finished products, parts, details, components and expenses mentioned in Items c and d of this Clause shall be determined in the contracts, depending on the technology and types of products made from the transferred technology.

10. The “date of issuance of the permit” mentioned in Article 811 of the Civil Code is the date the competent agency approves the technology transfer contract as stipulated in Article 32 of this Decree.

Article 3.- Technology transfer conditions

Individuals, legal persons or other subjects shall be entitled to transfer technologies mentioned in Article 807 of the Civil Code when they fully satisfy the following conditions:

1. The transferor is the lawful owner of the technology or is entitled to transfer the right to use the technology.

2. The technology does not violate the provisions in Article 5 of this Decree.

Article 4.- Contents of technology transfer

The technology transfer includes:

1. The transfer of industrial property objects: patents, utility solutions, industrial designs and trademarks which are being protected by Vietnamese laws and permitted to be transferred.

2. The transfer of technological secrets and know-hows in the forms of technological options, technical solutions, technological processes, preliminary design and technical design documents, formulas, technical parameters, drawings, technical diagrams, computer software (which are transferred under the technology transfer contracts), database on the transferred technologies (hereafter called technical information for short) accompanied or unaccompanied with machinery and equipment.

3. The transfer of production rationalization and technology renovation solutions.

4. The provision of various services in support of the technology transfers so as to enable the transferees to acquire the technological capability in order to create products and/or services of the quality determined in the contracts, including:

a/ Support in the selection of technologies, guidance on the installation of equipment, test operation of equipment lines before applying the transferred technology(ies);

b/ Providing consultancy on technological management and/or business management as well as guidance on the operation processes of the transferred technology(ies);

c/ Training to raise the professional and managerial skills of workers, technicians and managerial personnel in order to make them firmly grasp the transferred technology(ies).

5. Machinery, equipment and technical facilities accompanied one or several contents mentioned in Clauses 1, 2, 3 and 4 of this Article.

Article 5.- Technologies which are not allowed to be transferred

The technologies which are not allowed to be transferred under Article 808 of the Civil Code include:

1. Technologies that fail to meet the requirements prescribed by Vietnamese laws for labor safety, labor hygiene, human health and environmental protection.

2. Technologies that may cause adverse impacts and consequences to Vietnam’s culture, defense, national security, social order and safety.

3. Technologies that do not bring about any technical, economic or social efficiency.

4. Technologies in service of security and defense but not yet permitted by the competent State agencies.

Article 6.- Guaranteeing the right to use the transferred industrial property objects not to be infringed upon by a third party

If a third party infringes upon the right to use the transferred industrial property objects, it shall be handled in accordance with the industrial property legislation.

Article 7.- The right to develop the transferred technologies

1. The transferees shall be entitled to modify and/or develop the transferred technologies without having to notify the transferors thereof, except otherwise agreed upon in the technology transfer contracts by the parties

2. The transfer of modifications and/or develop-ments of the transferred technologies as agreed upon in the signed contracts or through a new or additional contract shall be made by the contracting parties on the basis of equality and mutual benefit.

Chapter II

TECHNOLOGY TRANSFER CONTRACTS

Article 8.- Form of contracts

1. All technology transfer activities must be carried out on the basis of written contracts for technology transfer (hereafter called as contracts for short) and comply with the provisions of this Decree. Contracts shall serve as the basis for the parties to fulfill their commitments and ensure the legality of the technology transfer, payment and dispute settlement.

2. Contracts may be established for the transfer of one or more than one technological content stipulated in Article 4 of this Decree.

In cases where the transferor transfers to the transferee more than one technological content, the transfer of such contents must be effected together under one contract.

In cases where the transferor transfers a technology accompanied with machinery, equipment and technical facilities, a list of such machinery, equipment and technical facilities must be enclosed with the contract.

3. For contracts for the transfer of production equipment lines or the transfer of complete equipment or equipment of an investment project which contain a content on technology transfer, a separate part of the equipment import contract must be made for such technology transfer. The technology transfer expenses must be separately calculated (not included in the equipment costs).

4. In cases where a contract has been established but the transferor and the transferee wish to have an additional technology transfer or change its contents, the parties shall have to establish an additional contract according to the provisions of this Decree.

Article 9.- Industrial property objects in technology transfer

In cases where the transferor transfers to the transferee the right to own or use industrial property objects and other contents mentioned in Article 4 of this Decree, the transfer of the right to own or use industrial property objects shall be made into a separate part of the technology transfer contract.

The part on the transfer of the right to use or own industrial property objects in the technology transfer contracts shall be subject to the industrial property legislation.

Article 10.- Contracts for the transfer of the results of new technology research and development.

1. The State encourages the transfer of the results of new technology research and development in accordance with the provisions of this Decree, on the basis of protecting confidential information as well as commercial secrets in accordance with the provisions of Vietnamese laws and international agreements which Vietnam has signed and/or acceded to.

2. The transfer of the results of new-technology research and development involving the use of the State capital shall comply with not only the provisions of this Decree but also the regulations on the use of State capital in scientific and technological activities.

3. The transferor and the transferee of the results of new technology research and development shall agree upon the right to submit applications for the protection of industrial property objects, the mode of payment and levels of remuneration for the author(s) of the results of such new technology research and development.

4. In cases where the parties have no agreement in their contracts on the right to submit applications for the protection of industrial property objects, the transferee of the results of new technology research and development shall be entitled to submit an application for the protection of the industrial property right with regard to the results of new technology research and development and shall have to pay remuneration to their author(s) when using the results of such technology research and development in accordance with the provisions of the industrial property legislation.

Article 11.- Contents of contracts

A contract shall include the following principal contents:

1. Names and addresses of the transferor and the transferee:

– Names and positions of the representatives of the parties and their account numbers.

– Summaries of the transferor’s results of the research and development activities or business and production results related to the transferred technology(ies).

2. Definitions of concepts and terms used in the contract.

3. Contents of the transferred technology(ies):

a/ Name(s) of the technology(ies);

b/ Detailed description of the characteristics, contents, labor safety and hygiene degrees of the transferred technology(ies); in cases where the transferor supplies machinery and equipment together with other contents of the technology(ies), the contract must clearly state the list of such machinery and equipment with their technical specifications, code numbers, manufacturing country(ies), manufacturing year(s), quality status and prices.

c/ The specific results to be achieved after the transfer is made (in terms of the quality of the commercial products or services, economic and technical norms, productivity, and social and environmental factors).

4. The contents of the transfer of the industrial property right (if any) in accordance with the industrial property legislation.

5. Powers and responsibilities of the parties in effecting the technology transfer.

6. Time limit, tempo and place for the supply of the technology(ies), machinery and equipment.

7. The contents related to the training and technical support to ensure the effectuation of the technology transfer, including:

a/ The details of the training program, form, subject areas, number of trainees and specialists of the transferor and transferee, venue, duration;

b/ Responsibilities of the parties in organizing the training and technical support;

c/ Qualifications, quality and results achieved after the training and technical support are provided;

d/ Expenses for training and technical support.

8. Prices and payment:

a/ Prices, conditions and mode of payment (kind of currency, place, time limit…);

b/ In cases where the transferred technology contains several different contents in the contract, the payment for each transferred content and the price of payment for the transfer of the industrial property right must be clearly stated;

c/ If, in the course of performance of a contract, one or more than one content of the contract is not performed, the transferee shall be entitled to request adjustment of the payment.

9. Commitments of the parties to guaranty, warranty and warranty period:

a/ The transferor undertakes to have the lawful right to the technology transfer;

b/ The transferee undertakes to strictly follow the technical information supplied by the transferor;

c/ On the basis of the strict observance of the transferor’s instructions by the transferee, the transferor shall have the obligation to ensure the realization of the technology transfer so as to achieve the following results:

– Achieving the objectives set in the contract;

– The technology(ies) creates commercial goods or services which meet the quality criteria clearly set in the contract;

– The technology(ies) satisfy the technical-economic norms, the raw material, fuel and material consumption norms clearly set in the contract;

– The technology ensures compliance with the legislation on environment, labor safety and labor hygiene.

d/ Other commitments of the parties in order to ensure that no mistakes shall be made during the technology transfer and the use of the results after the expiry of the contract’s effective term;

e/ Warranty and warranty duration:

– The transferor shall have to provide warranty for the transferred technological contents, including the quality of machinery and equipment (if they are supplied by the transferor), within a period agreed upon in the contract by the parties;

– In cases where the parties do not agree otherwise the warranty duration shall coincide the effective term of the contract;

– If, during the warranty period, the transferee strictly follow the transferor’s instructions but the created commercial products or services or the technology(ies) fail to meet the set criteria, the transferor shall have to apply the remedial measures with its own expenses.

10. The parties’ obligation to cooperate and exchange information.

11. Conditions for amending and canceling the contract.

12. The effective term of the contract and conditions for the parties to alter the effective term of or terminate the contract.

13. The scope and extent of confidentiality with regard to the transferred technology(ies).

14. Each party’s liabilities when the commitments in the contract are breached .

15. Matters related to disputes arising from the contract:

a/ Shall be dealt with in accordance with the provisions of the Civil Code;

b/ Form and procedures for dealing with disputes;

c/ The dispute-handling agencies (the trial agency or the agency to expertize the quality and price of the transferred technology(ies)).

16. Date and place of making the contract, full names and signatures of the representative of each contracting party.

17. The appendices detailing the contract’s provisions: lists of products and their quality criteria, the training and technical support plans, lists of relevant documents or information. The above-mentioned appendices shall constitute an inseparable part of the contract.

Apart from the above-mentioned principal contents, the parties may agree to include in the contract other provisions which are not contrary to the State regulations and the laws of Vietnam.

Article 12.- The language used in the contracts

The technology transfer contracts and their enclosed documents must be made in the Vietnamese language. In cases where the contracting parties are foreign individuals, legal persons or organizations, the contract documents may be also made in a universal foreign language agreed upon by the parties. The contract documents in the Vietnamese language and in a foreign language shall be of equal legal effect.

Article 13.- Provisions not allowed to be included in the contracts:

The following contents shall not be allowed to be included in the contracts:

1. Forcing the transferee to buy or receive from the transferor or a third party designated by the transferor, the following objects:

a/ Raw materials, materials;

b/ Production means: machinery, equipment and/or transport means;

c/ Intermediary products;

d/ Manual labor;

e/ The right to use industrial property objects;

In cases where the technology(ies) requires special guarantees regarding raw materials, materials, accessories, production means, intermediary products, technically qualified workforce or the right to use accompanied industrial property objects, such content must be explained in detail and agreed upon by the parties.

2. Forcing the transferee to accept a number of given norms (except for cases where the technology(ies) is(are) transferred to perform product-processing contracts) regarding:

a/ The production scope, quantity of products (or groups of products);

b/ The selling prices of products;

c/ Designating product outlets for the transferee; the operating mechanism and the relationships between the transferee and these outlets.

3. Restricting the product consumption markets, the export markets, the quantities and the structures of groups of products to be exported by the transferee.

4. Stipulating that the transferee is not allowed to go on with the transferred technology(ies) research and development or to receive similar technologies from other sources.

5. Forcing the transferee to unconditionally transfer to the transferor the right to use the results of the technological modifications or renovations created by the transferee from the transferred technology(ies), the right to lodge applications for the protection of the industrial property and industrial property rights and other rights of such technological modifications or renovations.

6. Exempting the transferor’s liabilities for:

– The transferor’s faults in the technology transfer;

– Machinery and equipment supplied by the transferor which fail to meet the quality as defined in the contract.

7. Forbidding the transferee to continue using the transferred technology(ies) after the expiry of the contract’s term (except for industrial property objects still in the duration of being protected in Vietnam).

In cases where the parties agree that the transferee shall not continue to use the transferred technology(ies) after the expiry of the contract’s term, they must explain the reasonability of such agreement and their contract must be approved by the competent technology transfer management agency (for contracts that must be approved as stipulated in Clauses 1 and 2, Article 32 of this Decree).

Article 14.- The time when the contracts come into effect

1. The time when a contract come into effect shall be agreed upon by the parties. In cases where a contract must be approved by the competent agency the time it comes into effect shall be the date it is approved.

2. For contracts that must not be approved but must be registered with the Ministry of Science, Technology and Environment as stipulated in Clause 3, Article 32 of this Decree, they shall come into effect from the date they are registered with the Ministry of Science, Technology and Environment.

3. If a contract contains a part on the transfer of industrial property objects, such part shall come into effect from the date it is registered with the competent State agency as prescribed in the industrial property legislation.

Article 15.- Term of contracts

1. The term of a contract is the duration in which the contract is effective.

The term of a contract shall be agreed upon by the parties according to the requirements and contents of the transferred technology(ies) but the maximum term shall not exceed seven years from the date the contract comes into effect.

2. If the parties agree upon their contract’s term being longer than the term stipulated in Item 1 of this Article, the competent State agency may permit such term to be longer than seven years but not exceed 10 years in the following cases:

a/ The technology(ies) is (are) of the world’s advanced type and the transferor pledges to continue to transfer modifications throughout the contract’s term;

b/ The transferred technology(ies) is (are) of great significance for the socio-economic development;

c/ The transferred technology(ies) creates commercial products of new generation(s) in the world.

3. The time limit for the transfer of the rights to own and/or use industrial property objects shall be agreed upon in accordance with the industrial property legislation.

Article 16.- Obligation to perform the contracts

The technology transferor and transferee shall be obliged to realize their agreement on each party’s rights and obligations defined in the contract, if a party violates the agreed provisions, it shall be liable for its violations according to the contract’s provisions on violations.

Article 17.- Mode of settling disputes

1. In the course of performance of a contract, the disputes between the parties shall be first of all settled through negotiation and conciliation.

2. In cases where the parties do not agree to settle their disputes at a arbitration body, the disputes shall be brought to the trial agency for settlement.

3. The disputes between Vietnamese organizations or individuals shall be settled in accordance with the Vietnamese laws at the arbitration bodies or trial agencies of Vietnam.

4. In cases where a dispute arising from a contract involves a party being a foreign individual, legal person or organization, it shall be settled at an arbitration body if the parties agree in their contract that an arbitration body shall be selected to settle disputes.

In cases where the parties have no agreement on the settlement of disputes at an arbitration body, the dispute shall be settled at a trial agency.

Article 18.- Invalidated contracts

1. Technology transfer contracts shall be regarded as wholly invalidated in one of the following cases:

a/ The contracting transferor fails to meet all the conditions stipulated in Article 3 of this Decree;

b/ Contracts for the transfer of the technologies which fall into the category(ies) not allowed to be transferred as stipulated in Article 5 of this Decree or the transfer of such technologies is contrary to the provisions of law;

c/ The contracts have not yet been registered, approved or the approval decisions are withdrawn under the provisions of this Decree;

d/ The right to own or use industrial property objects related to the transferred technology(ies) is suspended or canceled at the time the technology transfer contract is entered into (in accordance with the industrial property legislation).

2. A contract shall be regarded as partially invalidated when one of its contents violates the provisions of law but does not affect the contents of the other parts of the contract.

Article 19.- Legal consequences of invalidated contracts

1. When a contract is wholly invalidated:

a/ The parties must refrain from performing the contract if it has not yet performed;

b/ If the contract is being performed, the parties shall have to stop performing it;

c/ A wholly invalidated contract shall not give rise to any right or obligation of the parties from the time it is entered into. The party that causes damage due to its fault shall have to pay compensation therefor.

2. When a contract is partially invalidated:

a/ The parties shall have to agree to either amend the contract in accordance with the provisions of the Civil Code and this Decree or cancel the contract’s part which is regarded as invalidated;

b/ In cases where the performance of a partially invalidated contract causes legal consequences like a wholly invalidated contract, the provisions in Clause 1 of this Article shall apply.

Article 20.- Supplementing, amending or canceling part of a contract

A technology transfer contract may be supplemented, amended or canceled in part if so consented by all the parties.

For contracts that must be approved as stipulated in Article 32 of this Decree, any supplement, amendment, replacement or cancellation of part of such a technology transfer contract shall be effective only after it is approved in an additional approval decision by the agency that has approved the contract.

Article 21.- Termination of contracts

1. A contract shall terminate in the following cases:

a/ It has expired as stipulated in the contract;

b/ It terminates ahead of time under o a written agreement between the parties;

c/ A force majeure occurs and the parties agree to terminate the contract;

d/ It is canceled or suspended by the competent State agency managing the technology transfer as it has violated the laws;

e/ An already effective contract may be canceled upon a written agreement between the parties if no damage is caused to the interests of the State and the society; the parties shall be liable for any damage caused to a concerned third party by the cancellation of the contract;

For a contract that requires the approval, the parties shall, when canceling it, have to notify the agency that has approved the contract thereof.

f/ When a party admits its breach of the contract or there is a conclusion of a competent State agency that the contract is breached, the breached party shall be entitled to unilaterally suspend the performance of such contract.

2. In cases where a contract is terminated under the provisions of Point a, b or c, Clause 1 of this Article, the contract’s provisions on the settlement of disputes and complaints shall continue to be effective within the statute of limitation for legal proceeding acts as prescribed by law.

3. In cases where a contract is terminated under the provisions in Point d, e or f, Clause 1 of this Article, the breaching party shall have to pay compensation for the damage caused by its breach of the contract, except otherwise provided for in the contract.

Article 22.- Test operation before acceptance and evaluation of contracts

1. The transferor and transferee shall have to make a report on the evaluation of the results of each stage of the technology transfer such as:

– Evaluation and test operation before acceptance: machinery and equipment (if there are machinery and equipment supplied by the transferor), (for machinery, equipment and supplies subject to strict requirements for labor safety, which must be registered and licensed for use before being put into official use), technologies already transferred before official production;

– Evaluation of the contract performance by the parties according to the technological contents determined in each stage of the contract;

– Evaluation of the results achieved at the end of the contract against the set objectives.

These reports shall be sent to the agency that has approved the contract within 15 days from the date the evaluation is completed.

2. During the term of a contract, annually the transferee shall have to report the technology transfer results according to the contract’s contents to the agency that has approved the contract.

These reports shall also be sent to the Ministry of Science, Technology and Environment.

Chapter III

FINANCIAL PROVISIONS RELATED TO TECHNOLOGY TRANSFER

Article 23.- Prices of transferred technologies

1. The prices of machinery and equipment shall be determined through bidding for the procurement of equipment or through the examination of their quality and prices.

2. Depending on the advancedness of technologies, technology contents, the technology monopoly, the product quality and percentages of products to be exported, and economic, technical and social efficiency, the contracting parties shall agree upon the prices of payment for the technology transfer.

3. For the transfer of technologies from abroad into Vietnam and the domestic technology transfer, the payment prices for the technology transfer, including the objects mentioned in Article 4 of this Decree, which do not include the value of accompanied machinery and equipment, shall comply with one of the following limits:

a/ From 0 to 5 of the net selling prices of the products within the effective term of the contract; or

b/ From 0 to 25 of the after-tax profit, earned from the sale of manufactured products or the provision of services involving the application of the transferred technology within the effective term of the contract, or

c/ From 0 to 8 of total investment capital in cases where capital contributions are made with the value of the technology(ies).

For projects operating under the Law on Foreign Investment in Vietnam, the value of the technology as capital contribution shall not exceed 20 of the legal capital.

4. For the transfer of technologies from abroad into Vietnam and the domestic technology transfer, the payment price for the technology transfer, excluding the value of accompanied machinery and equipment, may account for up to 8 of the net selling prices or up to 30 of the after-tax profit or up to 10 of total investment capital in cases where capital contribution is made with the value of the technology(ies)with regard to technologies that satisfy the following requirements:

a/ The transferred technology(ies) is a high technology (according to the list announced by the Ministry of Science, Technology and Environment for each period);

b/ The transferred technology(ies) is of great significance for the socio-economic development in deep-lying, remote, mountainous or island areas;

c/ Most of products are for export (or high fees are paid for the technology(ies) for exported products).

Expenses for meals, accommodation, travel and salaries for trainees trained abroad may not be accounted into the limits in percentage mentioned in Clause 3 of this Article.

For special technologies with the approved payment amounts for their transfer being higher than the limits prescribed above, the Ministry of Science, Technology and Environment shall seek for the Prime Minister’s direction.

5. The prices of technologies transferred abroad from Vietnam shall be agreed upon by the parties in accordance with the laws of the country of the transferee and approved by the competent State management agency of Vietnam.

The Ministry of Science, Technology and Environment shall have to provide detailed guidance on the payment levels stipulated in this Article.

Article 24.- Modes of payment

Payment for the technology transfer shall be agreed upon by the parties according to the following modes:

1. Accounting the whole value of the transferred technology into the contributed capital of the investment projects.

2. Making periodical payments according to the percentage of the after-tax profit or the net selling prices.

3. Making lump-sum or installment payments in cash or goods, suitable to the technology transfer tempo and in accordance with Vietnam’s legislation on the payment in goods. The lump-sum payment shall be determined according to Article 23 of this Decree.

4. Combining the payment modes mentioned in Clauses 1, 2 and 3 of this Article.

Article 25.- Cost-accounting of technology transfer costs

For contracts that must be approved as stipulated in Article 32 of this Decree, if they have not yet been approved by the competent State agencies they have no legal effect and the technology transfer costs shall not be allowed to be accounted into the product prices.

Article 26.- Technology transfer tax

The transferor shall be obliged to pay tax on the sum of money earned from the technology transfer activity. The technology transfer tax rates shall comply with the provisions of law.

Article 27.- Fees on the evaluation of technology transfer contracts

When submitting dossiers of application for the approval of their technology transfer contracts, the applicants shall have to pay to the State agency competent to approve such contracts a fee according to the State regulations.

Chapter IV

STATE MANAGEMENT OVER TECHNOLOGY TRANSFER

Article 28.- Contents of the State management over technology transfer

The contents of the State management over technology transfer include:

1. Promulgating legal documents on technology transfer, organizing the guidance and supervision of the materialization of such documents.

2. Evaluating, approving and registering technology transfer contracts, extending, amending or suspending such contracts.

3. Designating qualified organizations as prescribed law to expertize the quality of equipment and facilities accompanied the transferred technology(ies).

4. Formulating the policy on the import of machinery, equipment, organizing research and application of scientific and technological advances in the domain of technology transfer.

5. Propagating and popularizing knowledge about technology transfer, supplying information on technologies.

6. Managing technology transfer consultancy activities, activities of recognizing or certifying the quality standards as well as technological processes and/or lines.

7. Supervising and inspecting technology transfer activities.

8. Settling complaints, denunciations and handling violations of the technology transfer legislation within the ambit of their power.

9. Creating favorable conditions for international cooperation in the domain of technology transfer.

10. Formulating policies and strategies and training a contingent of cadres specialized in technology transfer.

Article 29.- State management competence and responsibilities of the ministries, branches and localities for technology transfer activities

The Government shall perform the uniform State management over the technology transfer activities nationwide and assign, depending on the functions, tasks and powers of the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces and cities directly under the Central Government, responsibilities, to each of these agencies to assist the Government in performing the State management functions stipulated in Article 28 of this Decree.

The assignment of the performance of the tasks and powers of State management over the technology transfer activities to the ministries, ministerial-level agencies, agencies attached to the Government and localities aims to:

1. Promote the technology transfer activity management roles and responsibilities of the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces and cities directly under the Central Government in supervising and controlling the technology transfer activities and processes so as to ensure that the transferred technologies and imported machinery and equipment of investment projects are advanced and up-to-date, which bring about economic efficiency in production and business; promptly rectify mistakes and prevent consequences damaging the property of the State and people; and protect the people’s health and living environment.

2. Ensure the centralized and uniform management throughout the country and at the same time the rational assignment of responsibilities suited to the capabilities and specialized technical profession of each ministry, ministerial-level agency, agency attached to the Government or locality. The ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces and cities directly under the Central Government shall take direct responsibility to the Government for their assigned management scope.

Article 30.- Responsibilities of the ministries, branches and localities

1. Responsibilities of the Ministry of Science, Technology and Environment:

a/ The Ministry of Science, Technology and Environment shall act as the functional body to assist the Government in directing the uniform management over the technology transfer activities nationwide as stipulated in Article 28 of this Decree;

b/ Coordinating with the concerned agencies in designating expertizing organizations according to Decree No. 86-CP of December 8, 1995 of the Government on the assignment of State management responsibilities for the goods quality so as to implement Clause 3, Article 28 of this Decree;

c/ Performing the uniform professional manage-ment and guiding the materialization of various policies and law provisions on technology transfer activities. Coordinating with the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces and cities directly under the Central Government in supervising and controlling the technology transfer activities and processes;

d/ Managing technology transfer consultancy activities, activities of recognizing or certifying quality standards as well as and technological processes and/or lines;

e/ Formulating policies and strategies and training a contingent of cadres specialized in technology transfer.

2. Responsibilities of the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces and cities directly under the Central Government.

a/ The ministers, the heads of the ministerial-level agencies and agencies attached to the Government and the presidents of the People’s Committees of the provinces and cities directly under the Central Government shall have to:

Propose to the Government to issue or issue according to their respective jurisdiction various State management guidelines, policies and mechanisms for state management over the technology transfer activities in the fields and territories under their charge, which are compatible to the market economy so as to encourage organizations and individuals to quickly apply scientific and technological advances in order to produce high-quality products to meet the demands of the domestic and international markets;

Manage the technology transfer in investment projects and/or tendered projects which they are competent to approve and projects which they are authorized by the higher level to approve;

Approve technology transfer contracts assigned to them in accordance with Article 32 of this Decree;

Coordinate with the Ministry of Science, Technology and Environment and functional agencies in supervising, controlling and evaluating the technology transfer under the scope of their management;

b/ For contracts that must be approved as stipulated in Article 32 of this Decree, the Ministry of Finance shall have to direct the local financial and taxation agencies to examine the actual expenditures on the technology transfers according to the approved contracts as well as the enterprises’ observance of the financial regulations on technology transfers.

c/ The Ministry of Finance shall have to coordinate with the Ministry of Science, Technology and Environment in issuing regulations on the fees for the evaluation of technology transfer contracts.

Article 31.- Contract-approving decisions

Technology transfer contracts mentioned in Clause 1 and Clause 2, Article 32 of this Decree must be approved by the competent State agencies. Contract- approving decisions shall be made according to a form guided by the Ministry of Science, Technology and Environment.

The agencies that issue approving decisions shall be entitled to revoke their approving decisions.

Article 32.- Assignment of the competence to approve contracts

1. The Ministry of Science, Technology and Environment shall consider, evaluate and approve the following types of contracts:

a/ Contracts for the transfer of technologies from Vietnam to foreign country(ies);

b/ Contracts for domestic technology transfer, including the contents on the transfer of the right to own and/or use industrial property objects to which one party is a State organization or which involve capital contributed by the State.

c/ Technology transfer contracts of enterprises operating under the Law on Foreign Investment in Vietnam. In cases where the contracting parties have no State-contributed capital, the contract’s part on the transfer of the right to own and/or use industrial property objects shall not be subject to approval. For contracts with total payment value, excluding the value of equipment, equivalent to 30,000 USD or less and within one fiscal year the transferee has only one technology transfer contracts, they shall also not be subject to approval but must be registered.

d/ Technology transfer contracts of investment projects which are decided by the Government or the Ministry of Planning and Investment.

2. The ministries, ministerial-level agencies, agencies attached to the Government, People’s Committees of the provinces and cities directly under the Central Government and other agencies (which are entitled to decide investment according to the Regulation on Investment and Construction Management issued by the Government) shall consider, evaluate and approve technology transfer contracts of investment projects funded by the State capital under their respective competence (according to the assignment under the Regulation on Investment and Construction Management issued by the Government) which are other than those stipulated in Clause 1 of this Article.

3. The following technology transfer contracts shall not be subject to approval but must be registered with the Ministry of Science, Technology and Environment:

– Contracts for the transfer of foreign technologies into Vietnam which are other than those stipulated in Clauses 1 and 2 of this Article.

– Contracts for domestic technology transfer which are other than those stipulated in Clause 2 of this Article and valued at more than 30,000 USD.

4. Within 15 days after issuing the contract-approving decisions, the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces or cities directly under the Central Government shall send copies of such decisions to the Ministry of Science, Technology and Environment.

The ministries and People’s Committees of the provinces or cities directly under the Central Government shall have to supervise the performance of the contracts approved by themselves.

The Ministry of Science, Technology and Environment shall have to guide the registration procedures for technology transfer contracts mentioned in this Article.

Article 33.- Dossiers of application for contract approval

A dossier of application for contract approval includes:

1. A request for the contract approval (according to the form set by the Ministry of Science, Technology and Environment).

2. The technology transfer contract and its attached appendices.

3. A written explanation of the objectives and possibilities to apply the technology(ies), labor safety and hygiene measures.

The explanation may be prepared by one of the parties, presenting the rationale of the contract, analysis and calculations about the market, raw materials, technologies, economic and financial considerations and the technological efficiency.

4. Information about:

– The legal status, representatives, the certification of the signatures of the contracting parties’ representatives, the ownership rights and other information about the contracting parties such as the names and addresses of the company(ies), the guarantors, the account numbers, the guaranteeing banks, the capital amount and documents authenticating the industrial property rights being protected in Vietnam;

– In cases where the contracting parties are joint venture enterprises operating under the Law on Foreign Investment in Vietnam, the dossiers of application for contract approval must be accompanied with a paper certifying that the technology transfer contract has been adopted by the Managing Board on the consensus principle.

Article 34.- Procedures and time limit for considering dossiers of application for contract approval

1. Dossiers of application for contract approval shall be sent to the evaluating and approving agencies as stipulated by Article 32 of this Decree.

2. The agencies having approving competence as stipulated in Article 32 of this Decree shall, within 45 days from the date of receipt of the dossiers which are valid and in compliance with the provisions of Vietnamese laws, have to evaluate and issue decisions to approve the technology transfer contracts.

In cases where they disapprove a contract, they shall, within the time limit mentioned in Clause 2 of this Article, have to clearly reply in writing the applicants clearly stating the reason(s) therefor.

3. In cases where the contract-approving agencies request the parties to supply additional documents or revise the contents of their contracts to make them comply with the provisions of Vietnamese laws, the parties shall be obliged to satisfy such requests within 60 days from the date of receipt of the written requests. If, past this time limit, the above-mentioned requests are not satisfied, the applications for contract approval shall be no longer valid.

These provisions shall not affect the parties’ right to continue submitting dossiers of application for contract approval.

4. The procedures for approving additional contracts shall be similar to the above-mentioned contract-approving procedures. Within 20 days from the date of receipt of the dossiers which are proper and in compliance with the Vietnamese laws, the approving agencies shall have to evaluate and decide to approve the additional contracts. In cases where they disapprove additional contracts, they shall have to reply the applicants in writing clearly stating the reason(s) therefor.

5. The dossiers of application for contract registration shall be sent to the Ministry of Science, Technology and Environment if such dossiers are complete, the Ministry of Science, Technology and Environment shall grant certificates of contract registration within seven days from the date of receipt of the complete dossiers.

6. The dossiers of application for registration of the transfer of the right to own and or use industrial property objects shall be submitted to the Industrial Property Department in accordance with the industrial property legislation.

Article 35.- The right to consult specialists

During the process of approving contracts, the ministries, ministerial-level agencies, agencies attached to the Government and People’s Committees of the provinces or cities directly under the Central Government shall be entitled to consult the professional agencies and specialists in the relevant domains. The consulted agencies and specialists shall have to give honest and objective opinions and keep secret the relevant information.

Article 36.- Complaints about the contract approval

1. Within 90 days from the date the ministers, the heads of the ministerial-level agencies or agencies attached to the Government, or the presidents of the People’s Committees of the provinces or cities directly under the Central Government issue decisions to approve or refuse to approve technology transfer contracts, the contracting parties or a third party shall be entitled to lodge complains about the contents of the decisions approving or disapproving their contracts to the ministers, the heads of the ministerial-level agencies or agencies attached to the Government, or the presidents of the people’s Committees of the provinces or cities directly under the Central Government.

2. Within 60 days from the date of receipt of the written complaints, the ministers, the heads of the ministerial-level agencies or agencies attached to the Government, or the presidents of the People’s Committees of the provinces or cities directly under the Central Government shall have to notify the complainants of the settlement results.

3. In cases where they disagree with the results of the settlement of their complaints by the ministers, the heads of the ministerial-level agencies or agencies attached to the Government, or the presidents of the People’s Committees of the provinces or cities directly under the Central Government, the parties shall be entitled to make complaints in accordance with the legislation on complaints and settlement of complaints or request the settlement according to the procedures for dealing with administrative cases.

Article 37.- Handling technology transfer-related administrative violations

The handling of technology transfer-related administrative violations shall be stipulated by the Government in a separate decree.

Chapter V

IMPLEMENTATION PROVISIONS

Article 38.- Transitional provisions

1. Technology transfer contracts already approved by the competent agencies before the effective date of this Decree shall continue to be effective.

2. Technology transfer contracts which have not yet been approved and if contain contents inconsistent with the Civil Code and this Decree must be revised so as to comply with the Civil Code and this Decree.

3. Technology transfer contracts stipulated in Clause 1 of this Article must be registered with the Ministry of Science, Technology and Environment within 60 days from the effective date of this Decree.

Article 39.- Implementation provisions

The heads of the ministries, ministerial-level agencies, agencies attached to the Government and the presidents of the People’s Committees of the provinces or cities directly under the Central Government shall have to implement this Decree.

The Minister of Science, Technology and Environment, the Minister of Finance and the heads of the concerned agencies shall guide the implementation of this Decree.

This Decree takes effect 15 (fifteen) days after its signing. The previous provisions which are contrary to this Decree are hereby annulled.

 

 

ON BEHALF OF THE GOVERNMENT
PRIME MINISTER

Phan Van Khai

 

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