INTERMINISTERIAL CIRCULAR

04/2004/TTLT/BTM/BCN DATED JULY 28TH, 2004 PROVIDING GUIDELINES ON ALLOCATION AND REALIZATION OF QUOTAS FOR TEXTILE AND GARMENT EXPORT TO THE US MARKET IN YEAR 2005

Pursuant to the Decree No. 29/2004/ND-CP dated January 16^th. 2004 by the Government detailing functions, duties, responsibilities, and organization of the Ministry of Trade;
Pursuant to the Decree No. 55/2003/ND-CP dated May 28^th, 2003 by the Government detailing functions, duties, responsibilities, and organization of the Ministry of Industry;
Pursuant to the Prime Minister’s guidelines on transfer of quotas for textile and garment export to the US market in year 2005 as specified in the Circular No. 1536/VPCP-KTTH dated March 28^th, 2005 by the Government Office;
Based on textile and garment production and trading at home in abroad, stocktaking of export activities in the end of year 2004 and the beginning of year 2005;
Based on the Vietnam Textile and Garment Association’s proposal,
The Inter-Ministry of Trade and Industry hereby provides complement to some certain clauses of the Interministerial Circular No. 04/2004/TTLT/BTM/BCN dated July 28^th, 2004 providing guidance on allocation and realization of quotas for textile and garment export to the US market in year 2005 as follows:

I. SUPPLEMENT TO CLAUSE I – GENERAL PRINCIPLES

I.1. Article 1 – Scope of quantitative limits: Quotas are divided into three groups:

- Group I: Including quotas for categories which are allocated in accordance with criteria in the Interministerial Circular No. 04/2004/TTLT/BTM/BCN and this Circular.

- Group II: Including quotas for categories which are allocated based on enterprises’ application.

-Group II: Including quotas for categories which are subject to automatic issuance of visa.

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Enterprises which have not allocated quotas for textile and garment export to the US market and have at least 100 industrial sewing machines (as certified in minutes of investigations conducted by Interministerial Inspectorate led by local Department of Trade in conjunction with Department of Industry and Department of Planning and Investment on equipments and production capacities of enterprises) are subject to automatic issuance of visa and considered for allocation of quotas for samples. If automatic issuance of visa is ceased, they are considered for allocation of visa.

II. AMENDMENT TO CLAUSE II – PRINCIPLES ON ALLOCATION OF QUOTAS:

II.1. Article 1 – Allocation of quotas: The two following forms of development quotas are abolished:

- Quotas for textile and garment lots manufactured of domestic materials.

- Quotas for enterprises exporting non-quota textile and garment products to the US market from July 2004 to June 2005.

Stipulations on application and procedure for allocation of these quotas are also eliminated.

6% of the total source added to other criteria as follows:

- 4% are added to the source of achievement quotas, improving the proportion of this source to 84% of the total source.

- 1%

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II.2. Article 2 – Basis for allocation and realization of quotas:

- Sub-Article 2.1: Achievement quotas: Achievement quotas are divided into three groups:

Achievement quotas are allocated in accordance with principles as specified in the Announcement No. 5226/TM-XNK dated October 14^th, 2005 and the Announcement No. 0301/TM-DM dated March 9^th, 2005 and attached documents.

Quotas for categories in Group II are allocated and realized in accordance with principles as specified in the Announcement No. 0186/TM-DM dated February 1^st, 2005 by the Ministry of Trade providing guidelines on allocation and realization of quotas for textile and garment export to the US market in year 2005.

- Sub-Article 2.2: Development quotas:

+ Supplement to Item 2.2.3: Quotas for enterprises joining chain and those with large textile and dyeing quotas are allocated and realized in accordance with the Announcement No. 0319/TM-DM by the Inter-Ministry of Trade and Industry.

+ Item 2.2.4: Quotas for enterprises with factory 500 km and more far from the Hai Phong Port or Ho Chi Minh City International Port are allocated and realized in accordance with the Announcement No. 6044/TM-DM dated November 16^th, 2004 by the Inter-Ministry of Trade and Industry.

+ Item 2.2.5: Quotas for enterprises with US large clients and clients with big, famous trademark are allocated and realized in accordance with the Announcement No. 5592/TM-XNK dated October 30^th, 2004 and the Announcement No. 5703 dated November 3^rd, 2004 by the Inter-Ministry of Trade and Industry.

II.3. Article 3 – Time for quota allocation is adjusted in legal documents providing detailed guidelines for each III. SUPPLEMENT TO CLAUSE IV – PRINCIPLES FOR REALIZATION

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- Date of submission is date showed on the Ministry of Trade’s stamp on incoming correspondence.

- Expiry date of quotas for criteria such as exchange and supplement in small volume, sample, pre-allocation, etc is specified in specific relevant legal documents.

III.2. Article 2 – Grant of visa and automatic issuance of visa

Stipulation on automatic issuance of visa for categories in Group III: Enterprises which do not meet conditions as specified in Article I.2 (including new-established enterprises which have not been allocated and realized quotas for textile and garment export to the US market) are subject to automatic issuance of visa. New-established enterprises have to declare to Export – Import Divisions certificate of their production capacity issued by Interministerial Inspectorates.

Based on realization of quotas for textile and garment export to the US market, the Inter-Ministry of Trade and Industry shall adjust the list of categories subject to quota allocation and those subject to automatic issuance of visa.

Lots of goods manufactured/processed in Vietnam using half-finished products shall be granted visa if they get certificate for the origin of Vietnam and meet US rules of origin.

III.3. Article 3 -

 Return, validity expansion, re-allocation or sanction on tardy return of quotas which have validity time of lower than 12 months are stipulated in detail in announcements on allocation of those and guidelines by the Inter-Ministry of Trade and Industry.

Transfer of quotas is implemented in accordance with Interministerial Circular providing guidelines.

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Enterprises which wish for exchange of quotas for the purpose of export shall submit application to the Ministry of Trade. The Inter-Ministry of Trade shall deal with enterprises’ proposal for quota exchange based on the Textile and Apparel Agreement, source of quotas, and coefficient of quota exchange at time of implementation.

III.5. Article 5 – Truster and trustee

Export of textile and garment products with trusted quotas shall be added to export achievements of truster.

IV. AMENDMENT AND SUPPLEMENT TO CLAUSE V – PRINCIPLES FOR IMPLEMENTATION

IV.1. Article 2 – Supplement:

The Textile and Apparel Administration Division (established under the Decision No. 1379/2004/QD-BTM dated September 27^th, 2004 by the Ministry of Trade) is responsible for supervising allocation and realization of quotas so as to assure equal, transparent  management and allocation as well as suitable, effective use of quotas; reviewing allocation of quotas for textile and garment export in year 2005 with the basis of enterprises’ export achievements in year 2004, quotas which are allocated wrongly must be revoked and violations in this domain must be imposed sanctions.

Shipment of foreign goods using quotas and the origin of Vietnam and other violations shall suffer from strict sanctions by the Inter-Ministry of Trade and Industry and/or be judged by security authorities.

Stipulations in the Interministerial Circular No. 04/2004/TTLT/BTM-BCN by the Inter-Ministry of Trade and Industry providing allocation and realization of quotas for textile and garment export to the US market in year 2005 to which this Circular does not provide amendment and complement remain effective.

The Inter-Ministry of Trade and Industry shall issues relevant legal documents based on situation of production and trading of textile and garment products in each period of time.

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FOR MINISTER OF INDUSTRY
DEPUTY MINISTER




Bui Xuan Khu

FOR MINISTER OF TRADE
DEPUTY MINISTER




Le Danh Vinh