THE GENERAL DEPARTMENT OF CUSTOMS

CIRCULAR No.131-TCHQ/GSQL OF JUNE 24, 1997 GUIDING THE IMPLEMENTATION OF DECREE No.65-CP OF OCTOBER 13, 1995 OF THE GOVERNMENT REGARDING THE PROCEDURES FOR GEM IMPORT AND EXPORT

I. GENERAL PROVISIONS:

1. Only enterprises that have been granted gem import-export permits by the Ministry of Trade shall be entitled to engage in the import and export of gems.

Enterprises established under the Law on Foreign Investment in Vietnam for gem business activities shall comply with the scope of their permits granted by the Ministry of Planning and Investment and with the annual gem import-export plans approved by the Ministry of Trade.

2. If gem-business enterprises which are not qualified for being granted import-export permits, wish to import and export gems, they must obtain permission from the Ministry of Trade for gem import-export assignment through enterprises having gem import-export permits.

3. The provisions of this Circular shall apply only to gem products and gem-set jewelry and art articles that have been refined and fashioned from raw materials exploited in Vietnam by units allowed to engage in gem import-export under the direction of the Vietnam Gem and Gold Corporation (VIGECO).

II. RESPONSIBILITIES OF THE VIETNAM GEM AND GOLD CORPORATION:

1. The Vietnam Gem and Gold Corporation shall list and inform the General Department of Customs of the names and addresses of its transaction offices and subsidiary units which are allowed to engage in the sale of export of gems (hereafter referred to as sale units).

2. To register with the General Department of Customs, and related provincial/municipal Customs Departments, the specific voucher forms to be used for the purchase and sale of gems, gem-set jewelry and art articles already ratified by the Ministry of Finance, as well as the forms of sealing, stamping and obtaining the signature(s) of the person(s) permitted to sign vouchers and seal documents.

3. The Corporation or sale units shall only be entitled to give invoices to the purchasers 10 days before their exit from Vietnam and shall have to provide guidance enabling the purchasers to abide by the Customs� regulations regarding the preservation of seals and presentation of goods, customs declarations and vouchers to border gate Customs Office at the place of exit.

4. Immediately after selling goods (except for holidays as prescribed by law), the Corporation or sale units shall have to go to the provincial/municipal Customs Departments and fill procedures for the payment of import tax and other revenues in accordance with the current provisions of law.

5. The Corporation and sale units shall revise their own managerial regulations and prepare procedures and books to record the amount of goods sold or left in stock every day, thereby creating reliable conditions for periodical or extraordinary inspection and examination conducted by the functional agencies with oversight of gem import-export activities.

III. CUSTOMS PROCEDURES:

Enterprises engaged in gem import and export which have been granted import-export permits by the Ministry of Trade shall be entitled to import and/or export gems.

All lots of gems, irrespective of their value, when being exported to foreign countries for sale or when being re-imported due to unsaleability, shall be required to have expertise certificates produced for the completion of customs procedures as prescribed.

1. When exporting a lot of gems valued at 10,000 USD or more, the enterprise shall submit to the border gate Customs Office a copy of dossier that includes:

- A copy of the gem import-export permit granted by the Ministry of Trade, notarized by the State Notary Public.

- The gem sale and purchase contract.

- The original gem expertise certificate granted by the competent agency of the State of Vietnam as prescribed.

- The gem sale and purchase vouchers issued by the Ministry of Finance.

2. When exporting a lot of gems valued at under 10,000 USD, the enterprise shall produce to the border gate Customs Office only the following:

- A copy of the gem import-export permit granted by the Ministry of Trade, notarized by the State Notary Public.

- The original gem expertise certificate granted by the competent agency of the State of Vietnam as prescribed.

- The gem sale and purchase vouchers issued by the Ministry of Finance.

3. When importing gems, the enterprise shall have to produce to the border gate Customs Office one set of dossier, including:

- A copy of the gem import-export permit granted by the Ministry of Trade, notarized by the State Notary Public.

- The gem sale and purchase contract or a document with equivalent value.

- The original gem expertise certificate granted by the competent agency of the State of Vietnam as prescribed.

4. Gem import and export enterprises shall pay the entire tax for each lot of imported or exported gems in accordance with the provisions of the Law on Import-Export Taxes detailed in Decree No.54-CP of August 28, 1993 of the Government and the documents guiding the implementation therefor issued by the Ministry of Finance and the General Department of Customs.

5. Non-commercial gem import and/or export:

5.1. The provincial/municipal Customs Department, when receiving specific sale invoices from VIGECO or its subsidiary sale units shall affix a seal of registration (the seal of the provincial/municipal Customs Department) on each specific invoice and open a record book for strict supervision of the number and series of the registered invoices.

5.2.1. Upon their exit from Vietnam, purchasers of gem products or gem-set jewelry and art articles at sale units attached to the Corporation, shall produce for the border gate customs officers:

- Two copies of the customs declaration on non-commercial export on form HQ2-96.

- The specific gem sale and purchase voucher issued by the Ministry of Finance, and which bears a seal of registration of the provincial/municipal Customs Department.

- A copy of the gem expertise certificate, certified by the Corporation.

- The purchased goods that have been sealed as prescribed in Point 2, Part II above.

5.2.2. The Corporation or its sale units shall produce one set of the dossier to fulfil the gem export procedures at the provincial/municipal Customs Department (where the procedures for the collection of gem export tax is completed), including:

- The customs declaration on form HQ2-96.

- The sale invoice (the fourth copy).

- The original gem expertise certificate granted by the competent agency of the State of Vietnam as prescribed.

The Customs Office shall conduct the inspection and comparison of the gems and the tax calculation and tax collection as prescribed by law.

5.3. The border gate Customs officers shall inspect customs declarations, purchase receipts and seals, open the seals and inspect the goods (comparing them with characteristics of the gems declared in the receipts and declaration) for consideration and certification of the actual export amount on the customs declarations.

- The border gate Customs Office shall keep one copy of the customs declaration and the third copy of the receipt; and return to the passenger one copy of the customs declaration and the second copy of the receipt.

- The third copy of the receipt and the customs declaration to be kept shall be gathered at the end of each day to be transferred to the provincial/municipal Customs Department that has affixed the seal of registration thereon for supervision of the use of receipts.

- The border gate Customs Offices shall open a separate record book to register the export of gems through the specific invoices stipulated in this document. Every month it shall report the results to the provincial/municipal Customs Departments.

5.4. When a provincial/municipal Customs Department receives the third copy of the voucher and the customs declaration from a border gate Customs Office, the section that has fulfilled the customs procedures for the sale unit involved shall re-examine and liquidate the dossier which is being kept. If any violation is detected, it shall be handled in accordance with the current provisions of law.

5.5. Upon their entry or exit through the border gates of Vietnam, passengers who bring along jewels or ornaments made of gold, silver, precious metals or stones shall have to comply with the regulations on duty-free luggage provided for in Decree No.17-CP of February 6, 1995 of the Government and the documents guiding the implementation thereof issued by the General Department of Customs.

IV. OTHER PROVISIONS:

1. The temporary import for re-export or the temporary export for re-import, of lots of gem products and gem-set jewelry and art articles for participation in trade fairs and/or exhibition shall comply with the provisions of :

- Decision No.390-TTg of August 1st, 1994 of the Prime Minister regarding the promulgation of the regulation on trade fairs and exhibitions.

- Circular No.05/TM-XNK of February 25, 1995 of the Ministry of Trade guiding the implementation of the regulation on trade fairs and exhibitions.

- Official Dispatch No.472/TCHQ-GSQL of March 18, 1995 of the General Department of Customs providing guidance for the implementation of the regulation on trade fairs and exhibitions.

2. Gems, raw materials and materials imported for the refining and fashioning into products for full export at the request of the orderers shall comply with Decision No.126/TCHQ-GSQL of April 8, 1995 of the General Department of Customs promulgating the regulation regarding customs management over the subcontracted production of import and export goods and raw materials imported for the production of goods for export.

3. Organizations that send abroad gem products and/or gem-set jewelry and art articles for sale shall comply with the regulations on import export procedures and pay all taxes according to the current laws on import-export taxes.

- If they fail to sell their goods, then when fulfilling the procedures for the re-import of such goods into Vietnam, they shall be considered for the reimbursement of the tax amount paid at the time of export.

- If the products were sold, the procedure for remitting money back into the country, shall comply with the regulations of the State Bank of Vietnam.

V. HANDLING OF VIOLATIONS:

Organizations or individuals that violate the above-said provisions, shall, depending on the nature and seriousness of their violations, be handled administratively or examined for penal liability as prescribed by law.

VI. ORGANIZATION OF IMPLEMENTATION:

1. Once every three months, the Corporation and its sale units shall compile a summary and report and produce dossiers and vouchers to the provincial/municipal Customs Departments for inspection and comparison.

The provincial/municipal Customs Departments shall compile statistical reports on the amount, weight and value of sales and the amount of taxes paid and send them, together with their comments on the situation, to the General Department of Customs (through the Customs Supervision and Management Department).

2. This Circular takes effect from July 1st, 1997.

In the course of implementation, if any problem arise beyond the competence of the local authority, it must be promptly reported to the General Department of Customs for direction.

For the General Director of the General Department of Customs
Deputy General Director
NGUYEN VAN CAM