Decision No. 38/2002/QD-TTg, on management of the manufacture, assembly and import of motorbike components, promulgated by the Prime Minister of Government

DECISION

ON MANAGEMENT OF THE MANUFACTURE, ASSEMBLY AND IMPORT OF MOTORBIKE COMPONENTS

THE PRIME MINISTER

Pursuant to the Law on Organization of the Government of December 25, 2001;
In order to put the manufacture, assembly and import of motorbike components into order, thus meeting the people’s legitimate demand for travel and the country’s current capability of investment in traffic infrastructure development; and at the same time to bring into full play the internal resources for fast development of Vietnam’s motorcycle industry and take initiative in well preparing for the process of international economic integration;
Based on the opinions of the concerned ministries and branches at the January 10 and 14, 2002 meetings held at the Government’s Office on the situation of management of the manufacture, assembly and import of motorbike components in 2001 as well as the measures for management thereof in the coming period;
At the proposal of the Minister-Director of the Government’s Office,

DECIDES:

Article 1.- To provide for a number of measures to manage the manufacture and assembly of motorbike as follows:

1. The Minister of Industry shall promulgate specific regulations on the criteria of a motorcycle-manufacturing and/or assembling enterprise, which shall serve as basis for reorganizing and developing Vietnam’s motorcycle industry. Such criteria must include investment scale, technical and technological levels, production and assembly equipment and product quality control; professional qualifications of technical workers and capability of production organization and management; product quality and treatment system for a clean environment.

2. Conditions for an enterprise to be licensed to assemble motorbike:

a/ Being an enterprise established and operating according to law provisions;

b/ Fully meeting the criteria prescribed in Clause 1 of this Article;

c/ Motorbike and components thereof manufactured or assembled by the enterprise must ensure quality and technical safety standards; ensure the observance of law provisions on industrial property;

d/ Making investment in manufacturing components reaching the minimum localization rate of 20% in 2002 (as prescribed in Joint-Circular No. 92/2001/TTLT-BTC-BCN-TCHQ of November 20, 2001 of the Ministries of Finance and Industry, and the General Customs Department as well as the supplements mentioned in Clause 1, Article 2 of this Decision).

3. The Ministry of Industry shall revise all the existing motorbike-assembling enterprises; those enterprises which fully meet the conditions prescribed in Clause 2 of this Article shall be permitted to continue the assembly; for new enterprises, they must be reported to the Prime Minister before the issuance of decisions to permit the assembly.

4. Basing itself on results of examination of the implementation of tax policies according to the localization rates in 2001, reports of the Public Security, Customs, Market Management and Registry agencies as well as detections by the press and people of wrong-doings committed by the motorcycle-manufacturing and/or assembling enterprises in 2001, the Ministry of Industry shall scrutiny them in order to apply proper handling forms, including the revocation of the decision to permit the assembly and cessation to import motorbike components; cases of serious violations must be prosecuted before law.

5. The Ministry of Communications and Transport shall promulgate the system of technical and quality standards of home-made motorbikes, motorbike frames and engines; and promulgate documents and regulations, and inspect the observance of law provisions on products quality and technical safety by enterprises. The Ministry of Science, Technology and Environment shall promulgate regulations and inspect the observance of law provisions on industrial property by enterprises. The above-said regulations must be promulgated right in the first quarter of 2002 in order to create favorable conditions for enterprises production and business activities, especially the manufacture of motorbikes bearing Vietnamese trademarks with good quality and reasonable prices.

Article 2.- To prescribe a number of measures to manage the import and export of motorbike components as follows:

1. The Ministry of Finance, the Ministry of Industry and the General Department of Customs shall add the following contents to Joint-Circular No. 92/2001/TTLT-BTC-BCN-TCHQ of November 20, 2001 guiding the implementation of tax preference policies for the manufacture of motorbikes and their engines:

a/ Conditions on investment in manufacturing motorbike details and spare parts which achieve the minimum localization rate of 20% in 2002 must be linked to the manufacture of the components belonging to several of the groups of major spare parts such as engines, frames and transmission parts.

For the engine-assembling enterprises, they must invest in manufacturing details which make up at least 20% of the whole engine.

b/ Specifying and working out mechanism to closely examine the joint-venture in manufacturing motorbike spare parts and components in order to combat the abuse or fraud;

c/ The via-bank payment must be specified that an irrevocable L/C must be opened.

2. Enterprises licensed to assemble motorbikes prescribed in Article 1 of this Decision may import components in service of the assembly within the scope of the registered categories as certified by the Finance Ministry (prescribed in Joint-Circular No. 92/2001/TTLT-BTC-BCN-TCHQ of November 20, 2001 and the relevant supplemented documents of the Ministries of Finance and Industry and the General Customs Department), and within the scope of the combined capacity prescribed in Clause 3 of this Article.

Enterprises must not purchase then re-sell imported components in any forms.

Enterprises which do not fully meet the conditions prescribed in this Clause shall not be permitted to import motorbike components.

3. The Ministry of Finance shall stipulate principles and methods for calculation of the combined capacity by mode of point marking, with priority given to technology and investment capital scale; and at the same time direct the inter-branch working team (established under the provisions at Point 5b, Section I of the Government’s Official Dispatch No. 938/CP-KTTH of October 18, 2001) in examining and calculating the points obtained by enterprises in order to determine the combined capacity for each enterprise. This capacity means the maximum capacity at which enterprises are permitted to assemble and/or import motorbike components in a year.

The provision in this Clause apply also to foreign-invested enterprises which manufacture and/or assemble motorbikes but fail to fulfil the responsibilities and obligations prescribed in the investment licenses.

4. After determining the combined capacity prescribed in Clause 3 of this Article, the Ministry of Finance shall notify such in writing to enterprises for realization; and at the same time notify the General Department of Customs thereof so that the latter can monitor and manage the import of motorcycle components, and notify Vietnam Registry Department thereof for managing the granting of frame and engine numbers for products turned out and consumed on the market within this capacity scope.

5. For those enterprises which manufacture and/or assemble motorbikes for export, the motorbikes assembled for export shall not be restricted in quantity prescribed in Clause 3 of this Article.

6. For enterprises which manufacture and/or assemble motorbike engines, apart from the engine quantity left for assembly as prescribed in Clause 3 of this Article, they shall be permitted to export unlimited quantity, or sell them to other domestic enterprises licensed for assembly. The Registry agencies shall base themselves on the enterprises purchase/sale contracts to grant the registry certificates for this quantity of engines according to the current regulations.

7. The Ministry of Finance, the Ministry of Industry and the General Department of Customs shall base themselves on the actual situation of domestic production to supplement in time the list of common motorbike spare parts and components which can be produced at home as prescribed in Appendix No. 8 to Joint-Circular No. 92/2001/TTLT-BTC-BCN-TCHQ of November 20, 2001 and the relevant supplemented documents of the Ministries of Finance and Industry and the General Customs Department.

8. The Ministry of Trade shall direct the Market Management bodies to closely coordinate with the Public Security and Customs forces as well as other forces in enhancing the combat against smuggling, trade fraud and fake goods production in the fields of manufacture, import and circulation of motorbike spare parts and components; strictly handle acts of violating law provisions.

Article 3.- Those enterprises which manufacture motorbikes and spare parts thereof for export may borrow capital from the Export Credit Support Fund, be given export reward according to the State�s current regulations. Those enterprises which invest capital in buying copyright for engine manufacture may borrow preferential credit capital from the Development Assistance Fund at the interest rate of 3%/year.

Article 4.- This Decision takes implementation effect 15 days after its signing.

Article 5.- The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People’s Committees of the provinces and centrally-run cities shall have to implement this Decision.