Chapter XI

STATE MANAGEMENT OF FOREIGN INVESTMENT ACTIVITIES

Article 112.- Guiding the investment activities

1. The ministries, branches and provincial-level People's Committeesshall have to guide the foreign investment activities in the fields and geographical areasunder their respective management, provide necessary information and create all favorableconditions for investors to select the investment opportunities in Vietnam, improve theadministration and revise the investment procedures in order to ensure simple and quickinvestment procedures.

2. The ministries, branches and provincial-level People's Committeesshall consult with the Ministry of Planning and Investment before promulgating accordingto their competence the legal documents related to foreign direct investment activities,in case of divergence of opinions, it must be reported to the Prime Minister forconsideration and decision.

Article 113.- Coordination of State management activities

1. The ministries, branches and provincial-level People's Committeesshall exercise the State management of foreign investment activities according to theprovisions of law, effecting the regime of coordination in the work of enterprisemanagement.

2. The provincial-level People's Committees shall have to promptlyhandle matters falling under their competence and guide enterprises to operate in strictcompliance with the regulations in the investment licenses and the provisions of law.

3. The Ministry of Planning and Investment shall sum up and provideinformation on the foreign investment situation for the ministries, branches and theprovincial-level People's Committees, periodically work with the Ministry of Finance, theMinistry of Trade, the State Bank, the General Land Administration, the General Departmentof Customs and the concerned provincial-level People's Committees in order to handle intime arising matters as well as petitions of foreign-invested enterprises, businesscooperation parties and put forward policies and measures to improve the investmentenvironment.

Article 114.- Competence to decide investment projects

1. The Prime Minister shall decide Group A- projects, including:

a) Projects, regardless of investment capital amounts, in variousfields;

- Capital construction of infrastructures in industrial parks, exportprocessing zones, hi-tech parks, urban centers; BOT, BTO and BT projects;

- Seaport and airport construction and business; sea shipping and airtransport business;

- Petroleum activities;

- Postal and telecommunications services;

- Culture; publication and press; radio and television; medicalexamination and treatment establishments education and training; scientific research;production of curative medicines for human use;

- Insurance, finance, audit, expertise;

- Prospection and exploitation of precious and rate natural resources;

- Construction of dwelling houses for sale;

- Defense and security projects.

b) Projects with investment capital of $ 40 million or more in suchbrandies as electricity, mining, metallurgy, cement, machine building, chemicals, hotels,apartments and offices for rent, entertainment-recreation- tourist complexes;

c) Projects using the urban land of 5 ha or more and other type of landof 50 ha or more.

2. The Ministry of Planning and Investment shall decide Group Bprojects (being those not prescribed in Clause 1 of this Article), except projects definedin Clause 3 of this Article.

3. The provincial-level People's Committees shall decide projectsdefined in Clause 1, Article 115 of this Decree.

Article 115.- Assignment of investment licensing responsibility

1. Investment projects assigned to the provincial-level People'sCommittees for investment licensing shall have to satisfy the following criteria andconditions:

a) Being in line with planning and plans for socio-economicdevelopment, which have already been approved;

b) Being other than Group A projects prescribed in Clause 1, Article114 of this Decree with investment capital amounts prescribed by the Prime Minister.

2. The provincial-level People's Committees shall not be assigned theresponsibility to grant investment licenses to investment projects in the following fields(regardless of investment capital amounts):

a) National highways and railways construction;

b) Cement production, metallurgy, electricity, edible sugar, liquors,beer, cigarettes; automobile and motorcycle manufacture and assembly;

c) Tour business.

Article 116.- The provincial-level People's Committees' function ofState management over foreign investment

The provincial-level People's Committees shall have the responsibility:

1. To make and announce lists of local projects attracting foreigninvestment, based on the approved socio-economic development planning and the coordinationwith concerned ministries and branches; to mobilize and promote investment.

2. To assume the prime responsibility for the appraisal, grantinvestment licenses and adjust investment licenses, decide to dissolve foreign-investedenterprises and terminate business cooperation contracts ahead of time regarding projectsunder their jurisdiction.

3. To take part in the appraisal of projects in their respectivelocalities, which are granted the investment licenses by the Ministry of Planning andInvestment.

4. To perform the function of State management over projects withforeign investment capital in their respective localities according to the followingprincipal contents.

a) Supervising the capital contribution, the observance of regulationsin the investment licenses as well as relevant legal documents;

b) Supervising the implementation of the provisions on financialobligations, labor and wage relations, social order and safety, the ecological environmentprotection, fire and explosion prevention and fighting;

c) Granting the land use right certificates; organizing the groundclearance; granting permits for opening head-offices, branches; registering residence forforeigners; recommending Vietnamese laborers to enterprises and granting certificatesaccording to current regulations;

d) Removing difficulties and problems of investors according to theircompetence, and proposing the ministries and branches to settle matters beyond theircompetence;

e) Assuming the prime responsibility for or joining other ministriesand branches in examining and inspecting activities of foreign-invested enterprises;

f) Evaluating socio-economic efficiency of foreign direct investmentactivities in their localities.

5. Quarterly, biannually and annually, the provincial-level People'sCommittees send reports on foreign investment activities in their localities to theMinistry of Planning and Investment.

Article 117.- The Planning and Investment Ministry's function ofState management over foreign investment

2. The Ministry of Planning and Investment shall act as the main playerin settling matters in the process of formation, deployment and implementation ofinvestment projects, including:

a) Guiding and coordinating with the ministries, branches andprovincial-level People 's Committees in drawing up the planning, plans and lists ofprojects calling for investment and conducting promotion activities to call forinvestment;

b) Assuming the prime responsibility for appraisal, granting theinvestment licenses and the adjusted licenses for investment projects under itscompetence;

c) By the Prime Minister's decision, authorizing the Industrial ParksManagement Board to grant, adjust and withdraw investment licenses for foreign projects ofinvestment in industrial parks, export processing zones and hi-tech parks at the proposalsof the provincial-level People's Committees or the Ministry of Science, Technology andEnvironment (for hi-tech parks);

d) Reconciling disputes when so requested;

e) Organizing the examination and inspection of the carrying out offoreign investment activities;

f) Making general evaluation of the socio-economic efficiency offoreign direct investment in Vietnam;

g) Deciding to dissolve foreign-invested enterprises and to terminatethe business cooperation contracts ahead of time with regard to projects under its

jurisdiction.

2. Annually, the Ministry of Planning and Investment sums up thesituation of investment licensing and foreign investment activities in Vietnam and reportit to the Prime Minister and notify the concerned ministries and branches thereof.

Article 118.- The function of State management over foreigninvestment of the other ministries, the ministerial-level agencies and the agenciesattached to the Government

The other ministries, the ministerial-level agencies and the agenciesattached to the Government shall have the responsibility:

1. To coordinate with the Ministry of Planning and Investment inelaborating legislation, policies and planning related to foreign investment.

2. To elaborate planning, plans and lists of their own projects callingfor foreign investment, organizing investment mobilization and promotion.

3. To give comments on matters falling under their jurisdiction in theappraisal of projects, granting and adjustment of investment licenses.

4. To promulgate and guide the implementation of policies, settleprocedures related to the deployment and implementation of investment projects.

5. To conduct specialized inspection; evaluate the socio-economicefficiency of the investment projects under their respective specialized management.

6. To promulgate technical criteria and processes related to their owneconomic and technical domains.

7. To perform other tasks under their jurisdiction as prescribed bylaw.

Article 119.- Regulations on inspection and examination

1. The inspection and examination of activities of foreign-investedenterprises and business cooperation parties must ensure the compliance with functions,jurisdiction and law provisions on foreign investment as well as on inspection andexamination.

2. The agencies having inspection and examination function shall haveto draw up plans for periodical inspection and examination to be addressed to the Ministryof Planning and Investment, the concerned provincial-level People's Committees andIndustrial Park Management Boards for the coordinated inspection and examination. Theperiodical specialized inspection and examination shall be carried out not more than oncea year for an enterprise.

3. Those who issue inspection and examination decisions incontravention of law or who take advantage of the inspection and examination to seekpersonal profits, harass and cause troubles to business activities of enterprises shall,depending on the seriousness of their violations, be disciplined or examined for penalliability; if causing damage, they shall have to compensate therefor as prescribed by law.

4. Foreign investors, foreign-invested enterprises, businesscooperation parties, organizations and individuals may complain or initiate lawsuitsagainst illegal decisions and acts of causing difficulties and troubles committed by Stateemployees and bodies. The complaint or lawsuit making and the settlement of complaints andlawsuits shall comply with the law provisions on complaints and denunciations.