Recommended actions

The Draft Decree focuses on administration of merchants' exports, temporary imports for reexport, transits, transshipments and passage of dual-use goods. Relevant entities should review the regulations of the Draft Decree and assess potential impacts for future compliance. Once this Draft Decree is effective, in-scope merchants may need to perform additional administrative tasks related to customs procedures, such as preparing and submitting declaration dossiers or applications for approval for an internal compliance program to state agencies.

In more detail

1. Governing scope

The Draft Decree regulates administration of exports, temporary imports for reexport, transits, transshipments and passage of dual-use goods (excluding goods for defense and security purposes).

2. Applicable subjects

The Draft Decree applies to (1) merchants conducting exports, temporary imports for reexport, transits, transshipments and the passage of dual-use goods, and (2) other relevant agencies and organizations.

3. Dual-use goods

• Under the Draft Decree, dual-use goods refer to items, software and technology that can be used for both civilian and military purposes or are related to the development, production, handling, operation, maintenance, storage, detection, identification or dissemination of weapons of mass destruction or their delivery systems.
• The local authorities that can issue the list of dual-use goods and approve declarations of dual-use goods are as follows:

1. The Ministry of Science and Technology: nuclear and special materials; electronic materials; electronics; computers; and telecommunications, sensors and lasers
2. The Ministry of Industry and Trade: metals and chemicals
3. The Ministry of Construction: aviation, maritime and aerospace
4. The Ministry of Health: biochemical items

4. Declaration of dual-use goods

• In principle, a merchant is only allowed to carry out customs procedures for exports, temporary imports for reexport, transits, transshipments and transfers after declaring each shipment of dual-use goods and obtaining relevant confirmation from the competent authority via the Vietnam National Single Window, except for in the following cases:
  • The merchant has obtained a decision on approval for its internal compliance program in accordance with the Draft Decree.
  • The merchant provides a written commitment that the goods will not be used for the purpose of producing weapons of mass destruction at the time of conducting customs procedures.
• Declarations can be made using the Vietnam National Single Window, available at www.vnsw.gov.vn.
• A dossier of declaration on dual-use goods must include the following:

1. Declaration information about the dual-use goods under a statutory form, including information about the end users¹ of the declared dual-use goods
2. Documents related to the shipment of dual-use goods (contract of export, temporary import, reexport, transit, transshipment or transfer) and a permit from the competent authority in accordance with the current regulations (if any)

• The competent authority shall send confirmation of the declaration to the merchant on the Vietnam National Single Window within two working days from the date it received the declaration dossier.
• Merchants must retain their declaration dossiers and related documents for at least five years to provide to the competent authorities per their request.

5. Internal compliance program

• An internal compliance program is a set of procedures established by merchants involved in the export, temporary import for reexport, transshipment, transit and passage of dual-use goods to ensure compliance with the Draft Decree and other legal documents related to strategic trade control.
• Merchants need to submit an application for approval for their internal compliance program to the MOIT. The application is subject to review and approval by the MOIT. During the review, the MOIT may conduct on-site inspections of merchants' production and business facilities.
• Upon review, the MOIT will issue a decision on approval for the internal compliance program (i.e., a decision approving that the merchant meets the requirements of the internal compliance program). Otherwise, the MOIT will provide a written response to the merchant regarding disapproval.
• The validity period of a decision on approval for the internal compliance program is five years and may be extended with an application for extension under a statutory form.
• The decision on approval for the internal compliance program may be revoked under certain circumstances.

6. Effective date

The expected effective date is currently unclear under the Draft Decree.

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This Client Alert is issued in cooperation between BMVN International LLC and Baker McKenzie.

1 Article 3.3 of the Draft Decree provides that an end user is a person outside or inside the territory of Vietnam who is the recipient and the final user of dual-use goods.