THE PRIME MINISTER

DECIDES:

Article 1.- Rural trades and subjects of application

1. The rural trades prescribed in this Decision include:

a/ Cottage-industrial and handicraft production in rural areas:

- Processing and preservation of agricultural, forestry and aquatic products;

- Production of construction materials, wood furniture, bamboo and rattan articles, porcelains and pottery, glassware, textiles and garments and small-scale mechanical engineering in rural areas;

- Treatment and processing of materials and raw materials in service of rural trades.

b/ Production of handicraft and fine art articles;

c/ Construction, intra-communal and inter-communal transport and other services catering for the production and life of the rural population.

2. Subjects of application:

a/ Households, individuals;

b/ Cooperation groups and teams, cooperatives, private enterprises, joint-stock companies, limited liability companies and partnerships.

Hereinafter they are collectively called rural craft establishments.

Article 2.- Policies to develop rural trades

1. The State shall elaborate plans and lay down orientations for developing the rural trades according to the market mechanism in a sustainable manner, well preserve the rural environmental sanitation, carry out the agricultural and rural industrialization and modernization, at the same time, combine the planning on traditional craft establishments with the development of cultural tourism.

2. The State shall adopt policies to encourage the consumption and use of products of the rural trades, particularly products made of domestic natural raw materials (timber, rattan, bamboo, leaves�) with a view to limiting the adverse impact of industrial, chemical and plastic products and waste materials on the environment.

3. The Sate shall encourage, create favorable conditions and adopt policies for the protection of the legitimate interests of production and craft establishments engaged in rural trades prescribed in Article 1 of this Decision, especially the traditional trades, in order to meet the domestic consumption and export demands, attract labor and contribute to generating employment in the countryside, eradicate hunger and reduce poverty, preserve and promote the nation�s cultural values.

4. The State shall protect the legitimate interests, the ownership over property, technological know-hows, inventions and innovations, copyright and industrial property rights, industrial models and designs of individuals and organizations investing in the development of the rural trades.

5. To encourage the voluntary setting up of associations of different trades or in different localities so as to render practical assistance to the development of the craft establishments, reflect their feelings and aspirations, contribute opinions to the State bodies in the elaboration of rural trade development mechanisms and policies.

6. To encourage and create favorable conditions for organizations and individuals to mobilize social resources for activities of providing support, counseling, information, marketing, job training, industrial promotion, research into technologies, models and designs for the development of the rural trades.

Article 3.- Land

1. The rural craft establishments which are using undisputed land in a stable manner shall be issued the land use right certificates by the People�s Committees of the competent (district or provincial) levels, so that they can feel at ease when making production development investment.

2. Annually, under the land use plannings and plans of the provinces or the centrally-run cities, the State shall permit the conversion of part of the agricultural and forestry land for the development of the rural trades.

For localities with many rural craft establishments, the provincial-level People�s Committees shall assign the district- or commune-level People�s Committees to set aside land areas and make investment in building the technical infrastructures of cottage-industrial and handicraft zones or clusters therein, create favorable conditions for the rural craft establishments to rent land for construction of their production workshops.

3. For the rural craft establishments wishing to have land for relocation of their old narrow and polluting production workshops or to rent land for construction of new production workshops and/or protection, care, rehabilitation and planting of raw material areas, the People�s Committees of the competent levels shall give them the pre-emptive right to rent land at the lowest rates.

4. The land-renting procedures:

A land-renting application shall consist of the following details:

- The organization�s or individual�s name (regardless of whether or not the land rentor holds a permanent residence register in the locality).

- The land use purposes.

- The location and acreage of the land to be rented.

- The land rent duration.

- The commitment to use the land for the right purposes.

Within 15 days after receiving the land-renting applications from the rural craft establishments, the commune-level People�s Committees shall consider and propose to the district-level People�s Committees (for applications filed by households, individuals, cooperation teams or groups, cooperatives) or the provincial-level People�s Committees (for applications filed by private enterprises, joint-stock companies, limited liability companies, partnerships).

Within 15 days after receiving the craft establishments� land-renting applications and the proposals of the commune-level People�s Committees, the district- or provincial-level People�s Committees shall reply and guide the concerned craft establishments to carry out other land-renting procedures.

5. The collected land rentals shall be left to the commune budgets for investing in the development of local infrastructures in accordance with the State Budget Law.

The General Land Administration and the Ministry of Finance shall have to monitor and guide the localities to apply the land-renting procedures and implement the land rental use policies prescribed in this Article.

Article 4.- Raw materials used for production

1. The provinces and centrally-run cities shall base themselves on their rural trade development requirements to elaborate plannings and plans on development of agricultural, forestry and aquatic raw material areas so as to ensure abundant sources of on-the-spot raw materials for stable development of the rural trades.

2. The rural craft establishments wishing to exploit raw materials being minerals resources shall be given priority in the granting of exploitation and use permits according to law provisions.

3. For raw materials being forest resources, apart from those exploited from natural forests and balanced by the Ministry of Agriculture and Rural Development in the annual exploitation and use plans, the establishments shall be encouraged to use raw materials from planted forests as well as imported raw materials.

For forestry products not banned from export, the establishments shall not, when exporting them, have to declare the origin of their raw materials and shall not be subject to export-quota restriction.

4. To encourage the development of the industries, cottage industry and handicrafts to produce or preliminarily process raw materials in service of the rural trades.

Article 5.- Investment and credit

1. The rural craft establishments shall enjoy investment preferences under the Government�s Decree No. 51/1999/ND-CP of July 8, 1999 detailing the implementation of Domestic Investment Promotion Law (amended) No. 03/1998/QH10.

2. The agencies receiving and processing investment preference registration dossiers shall have to clearly define the rural craft establishments� rights to enjoy investment incentives in the investment preference certificates; the executive agencies shall have to ensure these rights for the rural craft establishments without demanding any other formalities.

3. Rural craft establishments with good investment projects already evaluated by the district-level People�s Committees may borrow investment loans, enjoy post-investment interest rate support and investment credit guaranty from the Development Assistance Fund according to the conditions, order and procedures prescribed in the Government�s Decree No. 43/1999/ND-CP of June 29, 1999 on the State�s development investment credits.

The Ministry of Finance shall set concrete conditions for the rural craft establishments to enjoy this policy.

4. The rural craft establishments failing to meet the condition of loan security with mortgaged or pledged property may borrow loans according to the regulations on guaranty with a third party�s property.

5. The rural craft establishments may borrow capital from the credit institutions in the form of trust guaranty pledge by socio-political organizations according to the provisions in Article 26 of Decree No. 178/1999/ND-CP of December 29, 1999 on the credit institutions� loan security.

6. The State Bank of Vietnam shall direct the credit institutions to inform the rural craft establishments of the simple capital-borrowing procedures, publicly announce them, apply proper lending forms and create favorable conditions for these establishments to borrow loans for production development.

Article 6.- Taxes and fees

1. The rural craft establishments shall enjoy preferential tax rates under the Government�s Decree No. 51/1999/ND-CP of July 8, 1999 detailing the implementation of Domestic Investment Promotion Law (amended) No. 03/1998/QH10 regarding natural resource tax in accordance with the legislation on natural resource tax.

2. The rural craft establishments shall pay charges and fees according to the Government�s Decree No. 04/1999/ND-CP of January 30, 1999; any charges and fees contrary to law shall be cancelled and the collection thereof from the rural craft establishments is strictly forbidden.

3. For charges and fees for rural traffic works invested by the localities themselves, which are related to the rural craft establishments, the Ministry of Communications and Transport shall assume the prime responsibility and coordinate with the Ministry of Finance and the Ministry of Agriculture and Rural Development in providing appropriate guidance and regulations.

Article 7.- Product consumption information and markets

1. The ministries, the branches and the People�s Committees of different levels shall create conditions for the rural craft establishments to have timely access to information on markets, prices, specifications and standards of products according to the domestic and overseas market demands.

2. The rural craft establishments shall enjoy a reduction of 50% or more of the space rental when participating in domestic product-displaying fairs and exhibitions. The State shall encourage and create favorable conditions regarding the entry and exit procedures, and finance part of the expenditures for the rural craft establishments and craftsmen to visit, study, participate in product-displaying fairs and exhibitions or explore markets abroad.

3. The rural craft establishments may enter into joint venture and cooperation with organizations and individuals inside and outside the country for production and sale of products.

4. The Ministry of Trade shall direct overseas trade counselors to explore the markets of the host countries, introduce them to the domestic craft establishments, so that the latter can expand their export transaction relations; set favorable conditions for the rural craft establishments to conduct direct export. The Ministry of Trade shall assume the prime responsibility together with the concerned agencies for considering and organizing annual rewarding of those establishments that have recorded outstanding achievements in the export of handicraft and fine art articles.

Article 8.- Science, technology and environment

1. The Ministry of Science, Technology and Environment shall organize, direct and earmark necessary funding sources in the annual plans for the technological research and renewal, design improvement and utilization of domestic raw materials resources; guide the application of appropriate technologies in order to raise labor productivity, reduce costs, diversify products and increase the aesthetic value and sophistication of products turned out by craft villages� products; study and transfer technologies to treat wastes, putting an end to the environmental pollution caused by the rural trades.

2. The Ministry of Agriculture and Rural Development shall assume the prime responsibility and coordinate with the Ministry of Culture and Information and the Vietnam Union of Cooperatives in guiding households and individuals to invest in developing the rural trades, select, perfect and conserve the traditional technologies characterized with the national cultural traits.

3. The State shall adopt policies to reward and support individuals and organizations that carry out activities of researching, designing, improving products� designs and models, transferring technologies to households and individuals, and organizing investment in developing the rural trades in accordance with the legislation on intellectual property, science and technology.

4. The State shall encourage the rural craft establishments to import advanced machinery, equipment and technological lines so as to modernize production.

5. The rural craft establishments must take measures to treat wastes, ensure the environmental sanitation and relocate polluting workshops to appropriate places.

Article 9.- Regarding the products� quality

1. The rural craft establishments must constantly improve the products� quality and diversify products, making increasingly sophisticated handicraft and fine art articles imbued with the national cultural and traditional traits, thus enhancing their domestic and export competitiveness.

2. The establishments investing in the development of rural production and business lines shall take self-responsibility to consumers for their own products.

3. Households, individuals and organizations investing in the development of the rural trades shall have to register their products� quality standards, packing models and industrial designs with the local competent State bodies.

Article 10.- Labor and training

1. Regarding labor: Priority shall be given to the training and use of laborers who are members of households with land recovered by the State for the development of the rural trades, and local laborers.

2. Regarding training:

a/ Craftsmen may personally organize the handing-down of their trades and collect fees from their learners on the principle of mutual agreement and shall be exempt from various taxes on trade handing-down activities;

b/ Craftsmen, cooperatives, organizations and associations shall be encouraged to conduct trade handing-down and training courses for laborers;

c/ The State-run vocational training schools shall prioritize the job training for the rural craft establishments; the industrial fine art colleges must lay emphasis on raising the quality of training in creating designs and models of cottage-industrial, handicraft and fine art products for export;

d/ Depending on its local conditions and capabilities, each district may set up a center to train trades, particularly the traditional crafts of the locality.

3. The State shall acknowledge and adopt policies to honor craftsmen and skilled workers who have recorded merits in training, preserving and handing down traditional trades and skills to young generations; the owners of the craft establishments that have made many products accepted by the markets, attracted large numbers of laborers and made great contributions to the State; the State shall periodically consider and confer the titles of "craftsman" and "excellent worker".

- The State shall encourage and create favorable conditions for foreign craftsmen and experts to hand down, provide training in, and share experiences and production know-hows of foreign traditional handicraft and fine art trades with Vietnam.

4. The Ministry of Agriculture and Rural Development shall coordinate with the Ministry of Culture and Information, the Ministry of Labor, War Invalids and Social Affairs and the Vietnam Union of Cooperatives in prescribing the titles as well as the mechanism and policy to honor craftsmen and skilled workers.

Article 11.- Organization of implementation

1. The Ministry of Agriculture and Rural Development shall have the responsibility to:

a/ Elaborate plannings, plans and propose mechanisms and policies to encourage the development of the rural trades throughout the country and submit them to the Government for decision. Guide the localities to work out plannings and formulate projects for the development of the rural trades; define criteria for traditional handicraft and fine art trades for the implementation of preferential policies in the preservation and development of these trades;

b/ Coordinate with the concerned ministries and branches in planning and developing the rural infrastructures in service of the development of craft villages as well as rural trades;

c/ Assume the prime responsibility and coordinate with the concerned ministries and branches, namely the Ministry of Industry, the Ministry of Science, Technology and Environment and the Vietnam Union of Cooperatives, in deploying the industrial promotion work in each locality and each trade�s association, supply market information, share managerial and production experiences, procure equipment and consume products for the rural craft establishments;

d/ Guide the training and fostering of trades as well as business administration knowledge and skills for the rural craft establishments.

2. The Ministry of Trade shall assume the prime responsibility together with the Ministry of Finance and the concerned ministries and branches to study and apply different mechanisms and policies to assist the rural craft establishments engaged in rural trades, especially the traditional fine-art trades, in exploring markets, selling products in the domestic markets and exporting their products according to the simplest procedures and at the most preferential tax rates.

3. The Vietnam Union of Cooperatives shall join the concerned ministries and branches in formulating and implementing and concurrently guiding, propagating and assisting the craft establishments in complying with the State�s plannings, plans and policies on the development of the rural trades.

4. The People�s Committees of the provinces and centrally-run cities shall have the responsibility to:

a/ Make detailed plannings on the development of craft villages and rural trades, direct the establishments to formulate projects for developing specific trades.

b/ Construct the rural infrastructures in service of the development of craft villages and rural trades; direct districts and communes to build up small-scale clusters of cottage industries and trades so as to create level ground for the development of the rural craft establishments;

c/ Direct the localities and rural craft establishments to ensure order, security, protect production activities and preserve the environmental sanitation in the localities;

d/ Supervise, inspect and guide the rural craft establishments and craft villages in their observance of the State�s laws and regulations.

Article 12.- Implementation provisions

1. This Decision takes effect 15 days after its signing.

2. The ministries, the ministerial-level agencies and the agencies attached to the Government shall, depending on their functions and tasks, guide the implementation of the State�s policies according to this Decision.

3. The ministers, the heads of the ministerial-level agencies, the heads of the agencies attached to the Government and the presidents of the People�s Committees of the provinces and centrally-run cities shall have to implement this Decision.

For the Prime Minister
Deputy Prime Minister
NGUYEN CONG TAN