Decree No. 14/2018/ND-CP dated January 23, 2018 on border trade

DECREE

ON BORDER TRADE

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Law on Foreign trade management dated June 12, 2017;

At the request of the Minister of Industry and Trade;

The Government promulgates a Decree on border trade.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Decree specifies border trade mentioned in Article 53 and Article 54 of the Law on Foreign trade management on trade of goods conducted by bordering traders or residents; trade of goods and other activities related thereto mentioned in international agreements between the Socialist Republic of Vietnam and neighboring countries.

2. This Decree does not deal with temporary import, temporary export and transit of goods.

Article 2. Regulated entities

1. Traders, organizations and individuals engaging in border trade.

2. Authorities and organizations managing and operating border trade.

3. Other authorities, organizations and individuals relevant to border trade.

Article 3. Definitions

For the purposes of this Decree, the terms below shall be construed as follows:

1. “bordering country” means a country that shares its land border with the Socialist Republic of Vietnam, such as: People’s Republic of China, Lao People’s Democratic Republic and Kingdom of Cambodia.

2. “other checkpoint and area border crossings" means auxiliary checkpoints or border crossings defined by regulations of law on management of land border checkpoints.

3. “border resident" means:

a) A Vietnamese citizen having a permanent residence in a commune whose administrative boundary overlaps the national land border.

b) A person having the permit to reside in a bordering area issued by a competent police authority.

4. “border market" means either a border market, a checkpoint market or a marketplace in a checkpoint economic zone located in a commune whose administrative boundary overlaps the national land border with import, export or trade in goods conducted by bordering traders or residents.

5. Cross-border trade conducted by traders is considered import and export of goods prescribed in regulations of law.

Article 4. Payment in border trade

1. Border trade shall be paid with convertible foreign currencies, VND or currencies of neighboring countries.

2. Payment methods:

a) Bank transfer.

b) Cash payment.

c) Netting (the difference shall be paid by bank transfer).

Chapter II

CROSS-BORDER TRADE IN GOODS BY TRADERS

Article 5. Traders conducting cross-border trade in goods

1. Traders eligible to conduct cross-border trade in goods shall be Vietnamese traders include enterprises, cooperatives, household businesses or individuals registering business legally.

2. Traders having direct foreign investment, foreign companies and branches thereof in Vietnam shall be entitled to conduct cross-border trade in goods in compliance with commitments of international agreements to which the Socialist Republic of Vietnam is a signatory.

Article 6. Border checkpoints where cross-border trade in goods by traders is permitted

1. Border checkpoints where traders conduct cross-border trade in goods shall comply with the provision of Clause 1 Article 54 of the Law on Foreign trade management.

2. If the border trade conducted through an auxiliary checkpoint or border crossing, the People’s Committee of the bordering province shall decide or publish the list of auxiliary checkpoints and border crossings where purchase, sale or exchange of goods is allowed after discussing and reaching an agreement with relevant ministries or industries on the inspectorate and facilities serving state management.

3. The Ministry of Industry and Trade shall take charge or cooperate with relevant authorities in requesting the Prime Minister to consider whether allowing purchase, sale or exchange of goods through locations other than auxiliary checkpoints or border crossings mentioned in Clause 1 and Clause 2 this Article. On the basis of the Prime Minister, the People’s Committee of the bordering province shall reach an agreement with relevant ministries or industries on the inspectorate and facilities serving state management.

Article 7. Goods traded by traders

1. The trader’s goods for sale or exchange across the border shall comply with the provisions of the Law on Foreign trade management and physical guidance specifying the implementation of international trade of goods.

2. The Ministry of Industry and Trade shall take charge or cooperate with relevant authorities and People’s Committees of bordering provinces in updating the list of goods traded through auxiliary checkpoints or border crossings.

Article 8. Quarantine and inspection of food safety, quality control of traders’ goods for sale or exchange across borders

The trader’s goods for sale or exchange across the border shall comply with regulations of law soft or international agreements on health quarantine; quarantine of plants, animals or aquatic products; quality control of goods; or inspection of food safety.

Article 9. Forms of agreement in border trade conducted by traders

1. The cross-border trade by traders shall be conducted on the basis of the agreement reached by and between Vietnamese trader and trader of the neighboring country in any of the following forms:

a) Written agreement.

b) A statement of goods traded across the border if a written agreement is not available. The statement shall bear the signature or seal of the Vietnamese trader, who is responsible for accuracy of the statement.

2. The statement of goods mentioned in Point b Clause 1 this Article shall be made according to the specimen provided in the Appendix attached hereto.

Article 10. Taxes, fees and charges

1. Traders conducting cross-border trade in goods shall pay taxes, fees and charges in full in accordance with regulations of law.

2. VAT on goods traded across the border shall receive incentives in compliance with regulations of law and international agreements to which the Socialist Republic of Vietnam is refundable.

3. The trader's exported goods for sale or exchange across the border mentioned herein shall have value-added tax (VAT) refunded.

4. Taxes, fees and charges for cross-border trade in goods conducted by traders shall comply with regulations of law.

Chapter III

CROSS-BORDER TRADE IN GOODS BY BORDER RESIDENTS

Article 11. Border checkpoints where border residents conducting cross-border trade in goods

Goods of border residents shall be traded through the checkpoints and border crossings specified in Article 6 herein.

Article 12. Goods traded by border residents

1. Goods of border residents are goods that are produced in Vietnam or the neighboring country and sold or exchanged by residents in the bordering area between the two countries to serve their life or production.

2. The Ministry of Industry and Trade shall issue the list of goods traded by border residents mentioned in Clause 1 this Article.

Article 13. Tax on goods traded by border residents

1. Border residents purchasing, selling or exchanging goods on the list of goods traded by border residents issued by the Ministry of Industry and Trade according to Clause 2 Article 12 herein shall apply the duty-free allowance specified in Appendix V of the Government’s Decree No. 134/2016/ND-CP.

2. The value of goods that exceeds the allowance mentioned in Clause 1 this Article shall incur import duty and other taxes or fees (if any).

Article 14. Management of wholesaling of goods by border residents

1. Goods that are within the allowance mentioned in Clause 1 Article 13 herein but not used for production or consumption by border residents shall be taxable.

2. Traders may purchase wholesale goods mentioned in Clause 1 this Article at border markets and shall make statements of goods purchased.

3. Wholesale goods traded by border residents mentioned in Clause 1 of this Article shall undergo quarantine or food safety and quality inspection in accordance with Article 8 of this Article.

4. The Ministry of Finance shall provide instructions and specify the collection of tax on goods within the allowance but not used for production or consumption by border residents mentioned in Clause 1 this Article.

Article 15. Quarantine and inspection of goods quality and food safety in border trade by border residents

1. Quarantine of goods traded by border residents is not mandatory, unless there is an infectious disease or risk thereof as informed by a competent state authority.

2. Goods on the lists of plants, animals and aquatic products that have to undergo quarantine published by competent state authorities in each period shall undergo quarantine.

3. Food safety and quality inspection of goods traded by border residents is not mandatory, except for the goods mentioned in Clause 3 Article 14 herein.

Chapter IV

BORDER MARKETS

Article 16. Entities eligible to trade in goods at border markets

1. Vietnamese traders or individuals having permanent residence in bordering areas or permits for residing in bordering areas granted by competent police authorities.

2. Traders or individuals holding nationalities of neighboring countries and having one of the following valid documents: passport, border identity card or citizenship card (applied to border residents living in the land border routes of Vietnam – Laos or Vietnam – Cambodia), laissez-passer or other immigration documents granted in accordance with regulations of law of neighboring countries; traders, household businesses or individuals having business registration certificates granted by neighboring countries in accordance with regulations of law of neighboring countries.

3. Traders, household businesses or individuals having business registration certificates granted by neighboring countries may only trade in goods at border markets and shall comply with regulations of Vietnam law.

Article 17. Trade in goods at border markets

Trade in goods at border markets is regulated by the following documents:

1. The Government’s Decree No. 02/2003/ND-CP dated January 14, 2003 on development and management of markets, the Government’s Decree No. 114/2009/ND-CP dated December 23, 2009 on amendments to certain articles of the Decree No. 02/2003/ND-CP and other relevant legislative documents.

2. International agreements concluded by and between the Socialist Republic of Vietnam and neighboring countries.

Article 18. Goods traded at border markets

1. Goods traded at border markets shall be goods allowed to be sold in Vietnam according to regulations of law.

2. Goods traded at border markets shall comply with the provisions stated herein.

Article 19. Quarantine of goods traded at border markets

1. Goods traded at border markets shall undergo health quarantine; quarantine of plants, animals or aquatic products shall be quarantined in accordance with regulations of law thereon.

2. Goods traded at border markets shall undergo food safety and food quality inspection.

3. Goods imported from a neighboring country for sale at a border market shall undergo quarantine by a quarantine authority at the checkpoint of import. Goods exported from a border market to a bordering country shall undergo quarantine as prescribed by law.

Article 20. Taxes, fees and charges for goods traded at border markets

Traders, organizations, household businesses and individuals doing registered business at border markets shall conform to regulations of Vietnam law on taxes, fees and charges, such as: VAT, corporate income tax, excise tax, licensing fees and other taxes and fees (if any).

Chapter V

ENTRY AND EXIT OF PEOPLE AND VEHICLES IN BORDER TRADE

Article 21. Entry and exit of Vietnamese people and vehicles

1. Goods owners or persons authorized by goods owners, vehicle owners, vehicle operators, employees working on vehicles or vessels shall have one of the following valid documents: passport, identity card or citizenship card (applied to border residents living in land border routes of Vietnam - Laos or Vietnam - Cambodia), laissez-passer (seaman’s passport for vessels) or other related documents in accordance with regulations of Vietnam law.

Apart from the above-mentioned documents, vehicle operators shall have driving licenses appropriate for the type of vehicles they operate.

2. Vehicle owners and vehicle operators shall present or submit related documents when entering bordering areas.

3. Vietnamese vehicles, vehicles drivers and traders may go through border checkpoints or border crossing mentioned herein to enter/exit border markets of neighboring countries and are subject to inspection by competent authorities; follow entry/exit procedures for people and vehicles in compliance with regulations of law of Vietnam and neighboring countries if they enter inland areas of neighboring countries.

4. Vietnamese vehicles that cross the border to deliver goods at border checkpoints or border crossings and return within the day and vehicles that regularly cross the border shall be managed in accordance with regulations of law.

5. The vehicles and vehicle operators mentioned in this Article that wish to travel to transshipment points specified in transport conventions concluded by and between the Vietnam government and neighboring countries to ship goods shall comply with regulations of such conventions, protocols and other agreements concluded by and between the Socialist Republic of Vietnam and neighboring countries on immigration and transport of goods.

Article 22. Entry and exit of people and vehicles of neighboring countries

1. Citizens of neighboring countries that are goods owners or persons authorized by goods owners, vehicle owners, vehicle operators and employees serving on vehicles of neighboring countries shall be entitled to travel with vehicles transporting goods to pass by border checkpoints or border crossings specified herein and then enter transshipment points by presenting their passports, seaman's passports or identity cards (applied to border residents living in land border routes of Vietnam - Laos or Vietnam - Cambodia) or border laissez-passers granted by competent authorities of neighboring countries or other related documents.

2. Vehicles transporting goods of neighboring countries eligible to pass by border checkpoints mentioned herein to enter transshipment points shall be specified by competent authorities of Vietnam at bordering areas.

3. When entering/exiting border markets, checkpoint markets or markets in checkpoint economic zones of Vietnam to transport goods, vehicles and citizens of neighboring countries that are vehicle operators and traders thereof shall undergo inspection or quarantine by regulatory authorities at checkpoints; follow entry/exit procedures when they wish to enter inland areas of Vietnam.

4. Vehicles of neighboring countries that arrive at border checkpoints or border crossings of Vietnam to deliver goods and return to their countries within the day and vehicles of entities regularly crossing the border are not required to make customs declarations or submit documents on vehicles but shall undergo inspection and quarantine by regulatory authorities at checkpoints.

5. Vehicles of neighboring countries that arrive at border checkpoints or border crossings of Vietnam to ship goods at border checkpoints and return within a day and vehicles regularly crossing the border shall be managed in accordance with regulations of Vietnam law.

6. Citizens and vehicles of neighboring countries that wish to enter areas except other than border checkpoints or border crossings to ship goods shall comply with regulations of conventions, protocols and other agreements concluded by and between the Socialist Republic of Vietnam and neighboring countries on immigration and transport of goods.

Chapter VI

IMPLEMENTATION AND EFFECT

Article 23. Responsibilities of the Ministry of Industry and Trade

1. Take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in providing guidelines for implementing this Decree.

2. Take charge or cooperate with relevant ministries and industries in advising the Government or the Prime Minister to manage and operate border trade.

3. Cooperate with relevant ministries, industries and People’s Committees of bordering provinces in directing, operating and providing guidelines for border trade within its competence.

4. Take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in conducting border trade at auxiliary checkpoints or border crossing.

5. Take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in regulating cross-border trade in goods conducted by traders in case of congestion or potential congestion of goods at checkpoints or border crossings of bordering provinces, risk of environmental pollution, natural disasters, epidemics and other necessary cases.

6. Cooperate, exchange or reach an agreement with competent authorities of neighboring countries on cooperation mechanism in management of border trade.

7. Consolidate or make periodic or ad-hoc reports on border trade and send them to competent authorities.

Article 24. Responsibilities of relevant ministries and industries

1. The Ministry of National Defense shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in carrying out state management at border checkpoints within its competence.

2. The Ministry of Finance shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in providing guidelines for implementing tax, fee and charge policies and customs procedures for imported/exported goods; cooperate with the Ministry of National Defense in managing vehicles arriving at or leaving bordering areas in border trade.

3. The Ministry of Health shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in managing or providing guidelines for carrying out health quarantine in bordering areas and inspection of food safety in accordance with regulations of law on food safety in border trade.

4. The Ministry of Agriculture and Rural Development shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in managing or providing guidelines for carrying out quarantine of plants, animals or aquatic products or food safety in accordance with regulations of law on food safety in border trade.

5. The Ministry of Science and Technology shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in managing or providing guidelines for carrying out inspection of goods quality in border trade.

6. The Ministry of Transport shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in facilitating transport infrastructure development serving border trade; providing guidelines for implementing international agreements and regulations related to vehicles arriving at or leaving bordering areas.

7. The State Bank of Vietnam shall take charge or cooperate with relevant ministries, industries and People’s Committees of bordering provinces in managing or providing guidelines for making payments in border trade.

8. The Ministry of Public Security within its competence shall cooperate with relevant ministries, industries and People’s Committees of bordering provinces in managing residence in bordering areas, ensuring bordering security, managing immigration and vehicles arriving at or leaving bordering areas in border trade; intensify international cooperation with law enforcement authorities of foreign countries in taking actions against and response to criminals committing violations of border trade.

9. Relevant ministries and authorities shall cooperate with the Ministry of Industry and Trade in ensuring consistency with guidelines and directing management and operation of border trade within their competence.

Article 25. Responsibilities of People’s Committees of bordering provinces

1. Manage and operate border trade at border checkpoints in accordance with regulations of law and the Prime Minister in each period.

2. Comply with operation directions on border trade given by the Ministry of Industry and Trade and relevant ministries or industries.

3. Actively develop mechanisms or policies to encourage traders of all types of ownership to invest and develop activities supporting trade at checkpoints.

4. Direct relevant departments, industries and authorities of provinces to closely monitor border trade; report border trade in their provinces to the Ministry of Industry and Trade on a periodic or ad hoc basis.

5. Publish the list of auxiliary checkpoints and border crossings mentioned in Clause 2 Article 6 herein.

6. Take actions against congestion of goods in their provinces in compliance with Clause 2 Article 54 of the Law on Foreign trade management.

Article 26. Effect

1. This Decree comes into force from January 23, 2018.

2. The Decision No. 52/2015/QD-TTg dated October 20, 2015 by the Prime Minister on management of border trade with neighboring countries shall be superseded.

3. Documents publishing auxiliary checkpoints and border crossings where border trade is allowed issued by People’s Committees of bordering provinces in compliance with the Decision No. 52/2015/QD-TTg and Circulars issued under such Decision before the effective date of this Decree shall continue the effective periods mentioned in such documents.

4. Ministers, heads of ministerial and governmental authorities, chairpersons of People’s Committees of provinces/central-affiliated cities shall implement this Decree.