Chapter VII

EXPORT AND IMPORT, TECHNOLOGY TRANSFER, ENVIRONMENTAL PROTECTION

Article 71.- Registration of import plans

1. Within 60 days after being granted the investment licenses, theforeign-invested enterprises and business cooperation parties shall register their plansfor the import of machinery, equipment, accessories, supplies, raw materials.., for theentire period of the project's capital construction, or the annual import thereofaccording to the construction and installation tempo. The import plans may be supplementedor adjusted at the beginning of the first month of each quarter and each year inaccordance with the capital contribution schedule, the construction tempo and theproduction/business programs.

2. Basing themselves on the investment licenses, the economic-technicalexpositions and the technical designs of the projects, the agencies authorized by theMinistry of Trade shall, within 15 days after the receipt of complete dossiers, approvethe import plants for each project. Past the above time limit, if the plans are not yetapproved, the agencies authorized by the Ministry of Trade shall have to notify in writingthe enterprises and/or business cooperation parties thereof, clearly stating the reasonstherefor.

3. Under the same commercial conditions, foreign-invested enterprisesand business cooperation parties are encouraged to buy goods in Vietnam instead ofimporting them.

Article 72.- Requirements on import equipment, machinery supplies

Equipment, machinery and supplies imported into Vietnam for executionof investment projects must ensure their standards, qualities and conformity with theproduction, environmental protection and labor safety requirements stated in theeconomic-technical expositions, technical designs as well as the

compliance with the regulations on import of equipment and machinery.

Except the used equipment and machinery listed for import ban, theforeign-invested enterprises and business cooperation parties may decide and takeresponsibility for the economic-technical efficiency of the import of used equipment andmachinery, and ensure the technical as well as environmental protection requirements asprescribed by the Ministry of Science, Technology and Environment.

Article 73.- Expertise of imported equipment and machinery

1. Equipment and machinery imported to execute investment projects mustbe expertised in terms of their value and quality before they are imported or installed,except equipment and machinery procured through bidding.

2. Border-gate customs shall base themselves on the approved importplans to permit the import of equipment and machinery without demanding the presentationof expertise certificates.

3. Organizations performing the expertise of imported equipment andmachinery shall be the expertising companies licensed to operate in Vietnam, VietnameseState bodies with expertising function or expertising companies in foreign countries forthe expertise of equipment and machinery before they are imported. The investors shallhave to supply to the investment licensing agencies the information on the expertisingcompanies they have chosen.

The expertising organizations shall have to take legal and materialliabilities for the expertising results.

Where the value of the expertised equipment and machinery is lower thanthe value reported by the investor, the investor shall have to readjust the implementedvalue according to such results. If any, fraud is detected, the sinner shall be handledaccording to law depending on the seriousness of the violation.

4. In case of necessity, the investment license-granting agencies mayrequest the re-expertise of the value of imported equipment and machinery.

Article 74.- Financial leasing/purchase and renting of equipment ormachinery

1. For a number of projects with special requirements, foreign-investedenterprises and business cooperation parties may rent equipment and machinery, in thecountry and/or abroad for the execution of projects.

2. Where foreign-invested enterprises or business cooperation partiesmake the financial leasing/purchase of equipment and machinery to create their fixedassets, they shall be exempt from import tax.

3. Where foreign-invested enterprises or business cooperation partiesrent equipment and machinery to carry out production and business activities, they shallhave to comply with the following regulation:

a) They may rent only, equipment and/or machinery not yet included inthe technological chains registered in the economic-technical expositions, as well asmolds and accompanying accessories for production in a given period;

b) The equipment and machinery hired from overseas must be re-exportedupon the expiry of the leasing duration.

Foreign-invested enterprises and business cooperation parties shallperform the financial obligations for the lessors as prescribed by law.

Enterprises are entitled to account the equipment and machinery rentingexpenses into their business costs, must neither make the depreciation for the hiredequipment and machinery nor calculate the value of rented property into the value of theirown property.

The rented equipment and machinery, during the leasing term, shall notbe considered the property of the leasing parties when the procedures for the enterprisedissolution or bankruptcy are carried out.

Article 75.- Processing and re-processing

Foreign-invested enterprises and business cooperation parties tray cantout activities of product processing or reprocessing according to the objectivesprescribed in the investment licenses, concretely:

1. Undertaking the product processing abroad;

2. Undertaking the product processing at home;

3. Ordering the domestic processing of a product part or a number ofdetails which cannot be produced by the machinery, equipment or technological chains.

Article 76.- Goods export

Foreign-invested enterprises and business cooperation parties maydirectly export or entrust the export of their products, and may undertake the entrustedexport according to law provisions.

The enterprises shall fill in the export procedures at the CustomsOffices without having to register their export plans.

Except goods on the list of goods banned from export and the list ofgoods subject to conditional export, foreign-invested enterprises and business cooperationparties may directly purchase goods and products in the Vietnamese market for exportprocessing or export according to the regulations of the Ministry of Trade.

Article 77.- Sale of products in the Vietnamese market

For products sold in the Vietnamese market, foreign-investedenterprises may sell them directly or through sale agents without restriction on the saleareas. Enterprises may act as sale agents for other enterprises which have the same typesof products made in Vietnam.

The sale prices of products shall be decided by the enterprises. Forgoods and services subject to the uniform price control by the State, the sale pricesshall comply with the price brackets announced by competent State bodies.

Article 78.- Sale of products of export processing enterprises intothe Vietnamese market

The export processing enterprises may sell into domestic markets theirown products, including:

1. Raw materials, semi-finished products, to enterprises directlyengaged in the production of export goods;

2. Goods with domestic demand for import;

3. Discarded materials and faulty products, which still have commercialvalue.

The procedures and tax payment for the above-mentioned goods shallcomply with the law provisions on export and import.

Article 79.- Tax-guarantee warehouse

Foreign-invested enterprises producing export goods may set uptax-guarantee warehouses at the enterprises. Goods deposited into tax-guarantee warehousesare not liable to import tax payment.

Enterprises wishing to set up tax-guarantee warehouses must satisfy thefollowing conditions and earn out the following procedures:

1. Exporting at least 50% of their products;

2. Goods transported from the tax-guarantee warehouses into theproduction establishments must be registered and subject to customs supervision;

3. Goods put into tax-guarantee warehouses must not be sold on theVietnamese market. Where the Ministry of Trade permits the sale thereof on the VietnameseMarket, the enterprises shall have to pay import tax and other taxes according to theprovisions of law;

4. If goods deposited in tax-guarantee warehouses get damaged anddeteriorate thus failing to meet the production requirements, they must be re-exported ordestroyed. The destruction thereof must comply with the regulations and be subject to thesupervision by the Customs Office. Tax Office and Environment Office.

The General Department of Customs shall base itself on the aboveregulations to guide the granting of permits for the establishment of tax-guaranteewarehouses at foreign-invested enterprises and manage and supervise the activities oftax-guarantee warehouses.

Article 80.- Protection and encouragement of technology transfer

1. The Vietnamese Government creates favorable conditions for andprotects the legitimate rights and interests of the technology transferors in order toexecute investment projects in Vietnam according to law provisions on technology transfer;encourages quick transfer of technologies, particularly advanced technologies andtechnologies which satisfy one of the following requirements:

a) Technologies which create new and necessary products in Vietnam orproduce export goods;

b) Technologies which raise the technical properties, quality ofproducts and raise the production capacity;

c) Technologies which save raw materials, fuels; efficiently exploitand use natural resources.

2. It is strictly forbidden to transfer technologies which have adverseimpacts on ecological environment, public order and labor safety.

Article 81.- Transfer of technologies and capital contribution withtechnologies

1. The transfer of technologies by foreign-invested enterprises andbusiness cooperation parties shall be effected on the basis of technology transfercontracts as prescribed by the legislation on technology transfer.

2. The value of the transferred technology used for capitalcontribution shall be agreed upon by the parties and must in all circumstances not exceed20% of the legal capital.

Invention patents, technical know-how, technological processes,technical services... which are used for capital contribution shall be exempt from alltechnology transfer-related taxes.

3. When contributing capital with technologies, investors must compiledossiers on technology transfer. The technology transfer dossiers shall be sent togetherwith the project dossiers of application for investment licenses and must includedocuments relating to industrial property, industrial property protection deeds andwritten certification of technical properties, the principle for agreement on the value ofthe technology of the joint-venture parties.

The capital contribution with technologies must be approved by theMinistry of Science, Technology and Environment. The investment licensing agencies shallreadjust the investment licenses after the capital contribution with technologies isapproved.

Article 82.- Environmental protection

1. Foreign-invested enterprises and business cooperation, parties shallhave to abide by the regulations on and meet the criteria for environmental protection andobserve the Vietnamese legislation on environmental protection.

2. Basing itself on the technology's operation nature, level andenvironmental impacts, the Ministry of Science, Technology and Environment shall announcethe list of projects subject to the elaboration of reports on environmental impactassessment.

The elaboration and evaluation of the environmental impact assessmentreports shall comply with the provisions of the legislation on environmental protection.

3. For projects outside the above-mentioned list, the investors onlyneed to expound in their dossiers of application for investment licenses factors which mayaffect the environment, state the handling measures and commit themselves to protect theenvironment in the process of construction and business activities.

4. Where the investors apply international advanced environmentalstandards in the process of construction and business activities in Vietnam, they onlyneed to make registration thereof with the Ministry of Science, Technology andEnvironment.