In furtherance of the Prime Minister�s Decision No. 219/1998/QD-TTg of November 12, 1998 promulgating the Regulation on the economic and trade development promotion area of Lao Bao, Quang Tri province, hereafter referred to as the Regulation on Lao Bao Trade Area, the Ministry of Trade hereby guides matters related to the commercial activities in Lao Bao Trade Area, as follows:

I. SUBJECTS AND SCOPE OF COMMERCIAL ACTIVITIES IN LAO BAO TRADE AREA

1. Subjects of commercial activities:

a/ Vietnamese traders of all economic sectors that have their head offices located in Lao Bao Trade Area, and Vietnamese traders� branches in Lao Bao Trade Area, which have been granted business registration certificates by the Management Board of Lao Bao Trade Area, hereafter referred to as the Vietnamese traders in Lao Bao Trade Area.

b/ Foreign-invested enterprises, which have been licensed for investment in Lao Bao trade area by the competent agency(ies), and branches of foreign-invested enterprises in Vietnam, which are located in Lao Bao Trade Area, hereafter referred to as the foreign-invested enterprises in Lao Bao Trade Area.

c/ The foreign traders� branches, which have been licensed by the competent agency(ies) to be set up in Lao Bao Trade Area under the provisions of Vietnamese legislation on foreign traders� branches in Vietnam, hereafter referred to as the foreign traders� branches in Lao Bao Trade Area.

Subjects conducting commercial activities in Lao Bao Trade Area, as defined in Clauses a, b and c above, shall be called the Lao Bao Trade Area enterprises.

2. Scope of commercial activities:

The Lao Bao Trade Area enterprises shall be entitled to conduct commercial activities according to the provisions of Chapter II of the Commercial Law and Article 3 of the Regulation on Lao Bao Trade Area, more concretely:

a/ The Vietnamese traders in Lao Bao Trade Area shall be entitled to conduct commercial activities according to the contents of their business registration certificates and this guiding Circular.

b/ The foreign-invested enterprises in Lao Bao Trade Area shall be entitled to conduct commercial activities according to the contents of their investment licenses and this guiding Circular.

c/ The foreign traders� branches in Lao Bao Trade Area shall be entitled to conduct commercial activities according to their establishment licenses and this guiding Circular.

II. COMMERCIAL ACTIVITIES IN LAO BAO TRADE AREA

1. Goods export and import:

a/ The Lao Bao Trade Area enterprises shall be entitled to export and/or import goods according to their business demand, except for those on Vietnam�s list of goods banned from export or import.

b/ For goods on the list of goods subject to the conditional export and/or import (export and/or import goods regulated by quotas or requiring permits of the Ministry of Trade or the branch-managing ministries), the Lao Bao Trade Area enterprises must be allocated quotas or granted permits by the competent agencies.

In cases where the goods on such list are imported by Lao Bao Trade Area enterprises from enterprises in Vietnam for export to foreign countries, such Lao Bao Trade Area enterprises, when exporting such goods, shall have to produce the competent agencies� documents allocating quotas or granting permits to the said enterprises in Vietnam.

c/ The Lao Bao Trade Area enterprises which export and/or import types of goods not banned by Laos and other foreign countries but on Vietnam�s list of goods banned from export or import must obtain the Vietnamese Prime Minister�s permission.

d/ Vietnamese traders in Lao Bao Trade Area shall be entitled to purchase goods from inland Vietnam for export or sale in Vietnam, and to import goods from foreign countries into inland Vietnam for trading like inland Vietnamese enterprises according to provisions of Vietnamese law.

e/ Foreign-invested enterprises in Lao Bao Trade Area shall be entitled to purchase from inland Vietnam for export to foreign countries like foreign-invested enterprises located in inland Vietnam according to provisions of Vietnamese law.

f/ Foreign traders� branches in Lao Bao Trade Area shall be entitled to purchase goods from inland Vietnam for export to foreign countries, and import goods from foreign countries for sale in inland Vietnam according to the list of goods in which foreign traders� branches are allowed to trade in Vietnam and the Vietnamese law�s regulations on foreign traders� branches in Vietnam.

g/ The Lao Bao Trade Area enterprises and residents shall be entitled to purchase and bring goods from inland Vietnam into Lao Bao Trade Area for their daily use; the procedures therefor shall be prescribed by the General Department of Customs.

2. Business by mode of temporary import for re-export of goods

a/ All Lao Bao Trade Area enterprises shall be entitled to conduct the temporary import for re-export of goods of different kinds as their business activities.

The temporary import for re-export of goods being on the list of goods banned from export or import must be approved in writing by the Ministry of Trade.

b/ Goods temporary import for re-export business covers:

- The import of goods from foreign countries for export to other foreign countries with the procedures for importing goods into Lao Bao Trade Area and the procedures for exporting such goods out of Lao Bao Trade Area being carried out.

- The import of goods from inland Vietnam for export to foreign countries or the import of goods from foreign countries for export into inland with the procedures for importing goods into Lao Bao Trade Area and the procedures for exporting such goods out of Lao Bao Trade Area being carried out.

c/ The temporary import-re-export business shall comply with the Regulation on business activities by mode of temporary import for re-export, issued together with the Trade Minister�s Decision No. 1311/1998/QD-BTM of October 31, 1998, except for the provisions at Articles 3 and 4 and the provisions on dossiers for filling in the customs procedures related to the said articles of such Regulation.

3. Cross-bordergate goods transshipment business

a/ All Lao Bao Trade Area enterprises shall be entitled to conduct cross-bordergate goods transshipment business.

b/ The cross-bordergate goods transshipment business covers:

- The purchase of goods from one foreign country for sale to another foreign country without filling in the procedures for importing such goods into Lao Bao Trade Area;

- The purchase of goods from foreign countries for sale into inland Vietnam without filling in the procedures for importing such goods into Lao Bao Trade Area;

- The purchase of goods from inland Vietnam for sale to foreign countries without filling in the procedures for importing such goods into Lao Bao Trade Area.

c/ The cross border-gate transshipment business shall comply with the Regulation on business activities by mode of border-gate transit issued together with the Trade Minister�s Decision No.1311/1998/QD-BTM of October 31, 1998, except for the provisions in Articles 3 and 4 and the provisions on dossiers for filling in the customs procedures related to the said articles of such Regulation.

4. Transit of goods through Lao Bao Trade Area

a/ Lao Bao Trade Area�s enterprises specialized in the provision of goods forwarding or transporting services shall be entitled to provide services of transporting goods on transit through Lao Bao Trade Area.

b/ The transit of goods from foreign countries through Lao Bao Trade Area to other foreign countries shall comply with the provisions of Vietnamese law.

c/ Goods of domestic Vietnamese enterprises transported through Lao Bao Trade Area for export to foreign countries or for import into inland Vietnam shall be subject to the customs procedures at the first border-gate into Lao Bao Trade Area.

5. Goods processing:

a/ The Lao Bao Trade Area traders shall be entitled to undertake processing for foreign parties or inland Vietnamese parties and to order processing in foreign countries or inland Vietnam.

b/ The processing of goods on the list of goods banned from export or import shall comply with the provisions in Section 2, Part II of the Trade Ministry�s Circular No.18/1998/TT-BTM of August 28, 1998 guiding the implementation of the Government�s Decree No.57/1998/ND-CP of July 31, 1998 the goods import, export, processing, as well as purchase and sale agency activities with foreign countries.

The Lao Bao Trade Area traders engaged in goods processing may temporarily cease their export and/or import activities without needing any written approval of the Ministry of Trade.

6. Lao Bao Trade Area�s markets:

Lao Bao Trade Area�s markets include the Lao Bao border market and markets in Lao Bao Trade Area.

a/ Lao Bao border market:

- Subjects entitled to conduct trading activities in the Lao Bao border market include:

+ The Lao Bao Trade Area enterprises which have their trading places in the Lao Bao border market arranged by the market management board;

+ Residents with permanent or temporary residence registration in Huong Hoa district, including Lao Bao Trade Area, Quang Tri province, who have their trading places in the Lao Bao border market arranged by the market management board and have made business registration according to regulations.

+ Traders from Sepol district, Savanakhet province of Laos, who have their trading places in the Lao Bao border market arranged by the market management board and their business books granted by the Management Board of Lao Bao Trade Area.

- The Management Board of Lao Bao Trade Area shall be authorized to establish and dissolve the Lao Bao border market; set up and dissolve the management board of the Lao Bao border market; define the functions and tasks of the management board of the Lao Bao border market after reporting to and getting approval from the People�s Committee of Quang Tri province in conformity with the Regulation on organization and management of Vietnam-Laos border markets issued together with the Trade Minister�s Decision No.0807/1998/QD-BTM of July 15, 1998.

b/ Markets in Lao Bao Trade Area:

The markets in Lao Bao Trade Area shall be organized and managed according to the Ministry of Trade�s Circular No.15/TM-CSTNTN of October 16, 1996 guiding the organization and management of markets. Particularly, the planning and establishment of markets of grades 1 and 2, including the decision on setting up management boards of such markets, shall be assigned to the Management Board of Lao Bao Trade Area.

III. GOODS CIRCULATED IN LAO BAO TRADE AREA AND THE APPLICATION OF THE POLICY ON PREFERENCES FOR MOUNTAINOUS TRADE DEVELOPMENT

1. Circulated goods:

a/ Goods in Lao Bao Trade Area shall be freely circulated, except those on the list of goods banned from circulation and the commercial services banned from provision (List 1) issued together with the Government�s Decree No.11/1999/ND-CP of March 3, 1999.

b/ The Lao Bao Trade Area�s enterprises may trade in goods subject to business restrictions as specified in Section 1 of the list of goods and commercial services restricted from to business (List 2) issued together with the Government�s Decree No.11/1999/ND-CP of March 3, 1999 only after they are granted business licenses by the branch managing ministries.

c/ The Lao Bao Trade Area enterprises may trade in goods or provide commercial services subject to conditional business as specified in Section 1 of the list of goods and commercial services subject to conditional business (List 3), issued together with the Government�s Decree No.11/1999/ND-CP of March 3, 1999, only after they are granted certificates of business qualifications by the provincial/municipal branch managing services.

2. The application of the policies on preferences for mountainous trade development

The Lao Bao Trade Area enterprises shall be entitled to preference policies provided for in the Government�s Decree No.20/1998/ND-CP of March 31, 1998 on trade development in mountainous regions, offshore islands and ethnic minority regions.

IV. IMPLEMENTATION PROVISIONS

This Circular takes effect 15 days after its signing.

For the Minister of Trade

Vice Minister