DECISION No.195-TTg OF APRIL 8, 1996 OF THE PRIME MINISTER PROMULGATING THE REGULATION ON DUTY-FREE SHOPS

THE PRIME MINISTER

DECIDES:

Article 1.- To issue together with this Decision the Regulation on Duty-Free Shops

Article 2.- This Decision takes effect from the date of its signing; the earlier stipulations which are contrary to this Decision are now annulled.

The Minister of Trade, the Minister of Finance, the General Director of the General Customs Department shall have to guide and inspect the implementation of the Regulation issued together with this Decision.

Article 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 Commitees of the provinces and cities directly under the Central Government shall have to implement this Decision.

Article 1.-

1. Duty-free shops are shops that sell imported goods exempted from import duties to the people and in the areas, specified in Article 3 of this Regulation.

2. Activities of the duty-free shops shall be subject to the direct inspection and supervision of the Ministry of Trade and the Vietnam Customs.

3. Domestic enterprises are given priority to enter into joint venture for investment in and the construction of duty-free shops and creation of sources of goods for business.

Article 2.- General provisions on conditions and dossier of application for the opening duty-free shops:

1. An enterprise wishing to open a duty-free shop must obtain a business license from the Ministry of Trade.

2. The enterprises eligible for the granting of duty-free goods business licenses must fill the following conditions:

a/ They are established under Vietnamese law, operate in provinces or cities directly under the Central Government, with international checkpoints (airports, seaports, railway stations, land border gates), with the number of arrivals and departures exceeding 15,000 persons a year. The duty-free shops' operation must conform with the enterprises' business registration.

b/ They must have the necessary capital and material bases, including a system of standard shops and warehouses, which are convenient for sale activities and for the supervision and management by the Customs Office.

c/ They must have a personnel with managerial and professional skills.

d/ They must have a stable source of goods supply.

3. Those enterprises meeting the conditions prescribed in Item 2 of this Article and wishing to open duty-free shops may send their applications to the Ministry of Trade.

The dossier includes:

- An application for duty-free business,

- A copy of the Decision on the establishment of the enterprise,

- A copy of the business license of the enterprise

- The necessary papers testifying to the conditions stipulated in Item 2 of this Article,

- Documents issued by the General Customs Department and the agency managing the area where the shop shall be opened (airport, seaport, railway station...) which approves the location of the duty-free shop,

- Plans on cooperation with a foreign company or foreign companies (if any).

4. The Ministry of Trade shall consider the dossier and grant duty-free business licenses in accordance with the demand of each area and each location as stipulated in Article 3 of this Regulation.

5. Vietnamese enterprises which have been allowed to open duty-free shops or cooperate with foreign companies to trade in duty-free goods, are entitled to continue their business in accordance with the granted licenses and shall be responsible for implementing all the provisions of this Regulation.

Article 3.- Provisions on the location of duty-free shops:

1. Departure lounges of international airports, international seaports, international railway and land-road checkpoints, if meeting the stipulated conditions, are eligible places for the opening of duty-free shops in service of passengers on departure or transit (including operators of the transport means and the crews thereon).

2. On international flights of Vietnam Airlines or other airlines established under Vietnamese law, duty-free goods may be sold in service of passengers and aircrews.

3. The opening of duty-free shops to service the arriving of passengers (including aircrews and hostesses on international flights) at some international airports; downtown duty-free shops to service people waiting for departure and duty-free shops for members of the Diplomatic Corps as stipulated in Decree No.73-CP of July 30, 1994 of the Government shall be decided by the Prime Minister at the proposals of the People's Committees of the concerned provinces or cities and the concerned Ministries and branches.

4. The exact locations of duty-free shops as prescribed in Item 3 of this Article must be approved by the People's Committees of the provinces or cities directly under the Central Government; the locations of warehouses designated exclusively for duty-free goods must be adopted by the provincial or municipal Customs Office and be subject to the direct inspection and supervision of the Customs Office.

Article 4.- Provisions on goods sold at duty-free shops:

1. Goods sold at duty-free shops are goods imported in service of duty-free business with the approval of the Ministry of Trade under current regulations.

2. In addition to goods imported for duty-free business, duty-free shops are encouraged to sell goods produced in Vietnam and goods legally imported into Vietnam and legally circulated on Vietnamese market. These goods are considered to be export goods and subject to the policy on commodities for export in accordance with the current regulations on the import-export management.

3. Procedures for transporting goods into warehouses and from the warehouses to duty-free shops shall be stipulated by the General Customs Department.

4. Goods imported for duty-free business must be stuck with the label: "VIETNAM DUTY NOT PAID" issued by the Ministry of Finance or by the enterprises themselves and with the consent of the Ministry of Finance.

5. If goods imported for duty-free business with the approval of the Ministry of Trade, have been left unsaleable in stocks for a long time and the enterprise requests permission to settle them (discard them, pay import tax for domestic consumption or re-export them), there must be certification by the Customs Office and the owner of the enterprise and permitted by the Ministry of Trade. In this case, close inspection must be made by the Ministry of Trade so as to prevent the misuse of duty-free business to import consumer goods listed as goods to be imported in limited quantities not exceeding the stipulated quotas. Goods which are banned from import are not allowed for use as goods for domestic consumption.

In cases where the goods are broken or seriously damaged, a relevant report must be made with the certification by the Customs Office and the discard of goods must be carried out under the supervision of the Customs Office but not necessarily with permission from the Ministry of Trade.

Article 5.- Provisions on the sale procedures and obligations of tax payment at duty-free shops:

1. Conditions and procedures for sale:

a/ Selling goods to passengers on exit, entry or transit as stipulated in Article 3 of this Regulation, if the passengers produce their legal passports.

b/ Selling goods directly to passengers on international flights of Vietnam Airlines or other airlines established under Vietnamese law.

c/ People eligible for tax exemption, when buying duty-free goods must show goods-buying book together with their passports or identity cards issued by the Vietnamese Ministry for Foreign Affairs if the goods are bought for their own use; or the check book together with diplomatic notes or introduction papers, if the goods are bought for the offices.

d/ Foreigners, overseas Vietnamese and Vietnamese waiting for departure as prescribed in Article 3 of this Regulation shall have to show their passports and tickets with registered date of departure when registering to purchase goods. The goods shall be delivered at the exit checkpoints when the passengers have completed their exit procedures.

e/ With regard to duty-free goods for daily consumption by sailors, they may be sold according to the order for goods from the ship captain. The goods must be sealed in boxes and escorted to the ship by Customs officers before it leaves the port.

f/ People eligible for tax exemption are entitled to buy a fixed quantity of goods set by Vietnamese law: passengers on entry shall be entitled to buy a fixed quantity of goods with the quantity fixed by the State as duty-free luggage of entry or exit passengers. Outgoing sailors shall be entitled to buy goods for their reasonable personal needs, taking into considerable consideration of length of the trip.

Others shall be entitled to buy unlimited quantities of goods but must be responsible for the observance of regulations on import-export procedures as well as on the quantity of goods allowed for export or import.

2. Goods imported by the duty-free shops with the approval of the Ministry of Trade shall be exempted from the import duty in accordance with the guidance of the Ministry of Finance; if the goods are left unsaleable in stocks and allowed to be disposed of as goods for domestic consumption as prescribed in Article 4 of this Regulation, the taxes must be paid in full as provided for by law.

Goods produced in Vietnam and goods legally imported into Vietnam as prescribed in Article 4 of this Regulation shall be subject to the export tax (if any) if they are sold to passengers on exit or transit.

3. Other tax obligations, procedures for tax declaration and payment as well as other accounting and financial regimes shall be conducted in accordance with the guidance of the Ministry of Finance. With regard to sale invoices, if particular invoices are used, they must be approved by the Ministry of Finance.

Article 6.- Every 3 months, 6 months and annually, the enterprises doing business in duty-free shops must report their duty-free business operations to the Ministry of Trade, the Ministry of Finance, the General Customs Department and the relevant branches.

Article 7.- This Regulation takes effect from the date of its signing. The earlier provisions which are contrary to this Regulation are now annulled.