I. GENERAL PROVISIONS:

1. The allocation of quotas with fee collection shall be carried out on the principle of publicity, non-discrimination and encouragement of export of products made of raw materials available in the country or export to non-quota markets.

2. Quotas shall be allocated to enterprises producing textile and garment articles up to the technical standards set for export goods, having business registration certificates or investment licenses under the Law on Foreign Investment in Vietnam, having textile and garment commodity lines and have fufilled the 1999 quotas.

3. The ground for quota allocation is the volumes performed in 1999 by enterprises against their officially assigned volumes, excluding rewarded, bidded, readjusted or additionally allocated quotas according to the extraordinary demands.

4. For the EU market, a proportion of 30% of the total quotas of each product category shall be put aside for priority allocation to enterprises that have signed contracts directly with customers being European industrialists recommended by the European Commission. This priority shall be considered to be given to contracts signed no later than March 31, 2000. The enterprises allocated quotas shall have to ensure the above-said proportion, except for those assigned with small volumes: i.e. less than 50,000 products for cats. 4, 5, 8, 28 and 31; less than 30,000 products for cats. 6, 7 and 21; less than 10,000 products for cats. 14, 26, 29 and 73; less than 5,000 products for cat 15; less than 10 tons for cats. 68 and 161; and less than 3 tons for cats 78 and 83.

5. The Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry shall authorize the municipal People’s Committees of Hanoi and Ho Chi Minh City to directly allocate quotas to enterprises under their respective management. The allocation of quotas by the municipal People’s Committees of the two cities shall comply with this Joint Circular and the hand-over minutes between the Ministry of Trade, the Ministry of Planning and Investment, the Ministry of Industry and the two cities’ People’s Committees.

6. A proportion of around 5% of the quotas of textile and garment products to be exported to the EU, particularly T-shirt, polo-shirt (cat.4) around 10%, shall be reserved as the priority and incentives to be given to:

- Export enterprises that use home-made fabrics for producing garment products to be exported to the EU in 2000.

- Enterprises that export their products to non-quota markets in 1999.

The quota incentives and priority allocation shall be governed by specific regulations.

7. A proportion of quotas of textile and garment products to be exported to the EU for categories 5, 6, 7, 15, 21, 26 and 73 shall be reserved for biddings by enterprises throughout the country. The volume of each category opened to bidding shall be deducted from the annually additional and growing quota source.

The quota bidding shall comply with the Regulation on bidding of quotas of textile and garment products to be exported to the quota-regulated markets issued together with the Ministry of Trade’s Decision No.1405/1998/QD-BTM of November 17, 1998.

II. THE PROCEDURES FOR QUOTA REGISTRATION:

Enterprises that wish to use quotas of textile and garment products to be exported to the quota-regulated markets shall have to file their written registration dossiers (according to the set forms enclosed herewith) to the Ministry of Trade (the Export and Import Department), at 21 Ngo Quyen street, Hanoi city.

The registration time limits:

+ For commercial quotas: before October 10, 1999;

+ For industrial quotas: before April 10, 2000.

III. REGULATIONS ON THE QUOTA ALLOCATION:

1. For industrial quotas:

Before April 10, 2000, the enterprises that fully meet the conditions prescribed in Section I, Point 4, and submit their industrial contracts to the Ministry of Trade or the municipal People’s Committee of Hanoi or Ho Chi Minh City (for enterprises managed by the said two cities’ People’s Committees), shall be allocated industrial quotas according to the prescribed percentage.

The volume of industrial quotas which has not been allocated shall be converted into commercial quotas.

2. For commercial quotas:

The quota allocation shall be divided into 2 batches:

a/ Batch 1: In October 1999, the commercial quotas shall be allocated with a volume equal to 100% of the volume fulfilled in the first 9 months of 1999 (except for enterprises that had to perform industrial quotas as prescribed at Point 4, Section I).

b/ Batch 2: By January 2000, the remaining commercial quotas shall be allocated on the principle prescribed at Point 2, Section I.

The allocation of priority quotas and incentive quotas to enterprises shall be governed by specific regulations.

3. After March 31, 2000, those industrial quotas which are still out of the signed contracts shall be converted into commercial ones and allocated to the concerned enterprises.

Beyond the above-said quota assignment batches (except for those assigned to enterprises managed by the People’s Committees of the said two cities), any matters arising in the course of management shall be considered and proposed by the inter-ministerial management group to the Ministry of Trade’s leadership for handling, then the written reports thereon shall be sent to the Ministry of Planning and Investment and the Ministry of Industry.

IV. IMPLEMENTATION REGULATIONS:

1. Returning:

If enterprises, after being allocated quotas, are unable to fulfill such quotas, they must return them to the Ministry of Trade or the People’s Committees of the two cities, so that the two cities, the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry can promptly allocate them to other enterprises. The quota trading is strictly prohibited.

Those enterprises that have not used up their quotas and failed to return them before September 30, 2000 shall have the unused quotas carried forward into the subsequent year’s quota volume.

2. Quota fee:

Each product category shall be subject to the quota fee specified in the Appendix enclosed herewith.

The enterprises shall pay the quota fee upon each notice on the assignment of the right to use quotas or each export lot. Upon receiving export licenses (E/L) at the regional export and import management sections, enterprises shall have to produce vouchers of payment of the quota fee for their goods lots into the Ministry of Trade’s account No.945-01-475 at Hanoi State Treasury.

The deadline for payment of the fee for the whole allocated quota volume shall be September 30, 2000. Past that deadline, enterprises that fail to remit fee amounts into the said account shall have their quotas automatically invalidated. The enterprises receiving quotas additionally allocated after September 30, 2000 shall have to pay the fee within 15 days after the signing of quota allocation notices.

The Ministry of Trade’s regional export and import management sections shall have to urge and inspect the full fee payment by enterprises.

3. Consignment and consignment undertaking:

In cases where an enterprise, which has been allocated quotas, has no customer or signed inefficient direct contracts, it may consign export of their products to other qualified enterprises, on the principle that products must be produced at the enterprise with quotas and certified in writing by the Ministry of Trade’s Export and Import Management Section. The consignment commission shall be agreed upon by the concerned parties.

4. Reporting regime:

Enterprises shall have to strictly observe the regime of reporting the quota performance each quarter and each year according to the set forms enclosed herewith. The reporting time limit shall be the 10th day of the first month of each quarter.

V. IMPLEMENTATION PROVISIONS:

The Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry, which have been assigned by the Prime Minister the task of State management over the implementation of the textile and garment trading agreements with countries which require quotas, shall have to organize and guide the implementation of provisions of the agreements already signed and the regulations already promulgated, and coordinate with the concerned domestic and foreign agencies in promptly solving problems arising in the course of implementation.

Enterprises shall have to strictly comply with provisions of the current textile and garment trading agreements signed with the quota-regulated markets, and prevent commercial fraudulence acts.

Violating enterprises shall be sanctioned with the withdrawal of quota or the suspension of assignment of the right to use quotas, or handled according to provisions of law, depending on the seriousness of their violations.

The management group jointly set up by the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry shall have to inspect, monitor and periodically report the performance result and publicize the situation on "Bao Thuong Mai" (the Trade Newspaper), "Tap Chi Thuong Mai" (the Trade Review), "Bao Dau Tu" (the Investment Newspaper" and "Bao Cong Nghiep" (the Industry Newspaper) so as to promptly provide the concerned enterprises with necessary information.

This Joint Circular takes effect after its signing and replaces Joint Circular No.20/1998/TTLT-BTM-BKHDT-BCN of October 12, 1998 of the Ministry of Trade, the Ministry of Planning and Investment and the Ministry of Industry.

For the Minister of Planning and Investment

Vice Minister

For the Minister of Industry

Vice Minister

For the Minister of Trade

Appendix No.1

THE COLLECTION LEVELS OF THE FEE FOR QUOTAS OF TEXTILE AND GARMENT PRODUCTS TO BE EXPORTED TO THE EU MARKET

1 T-shirt 8c 300.0 dong/piece

2 Woolen sweater 11a 1,000.0 dong/piece

3 Trousers 5a/b 1,000.0 dong/piece

4 Women’s shirt 7/8a 500.0 dong/piece

5 Jacket 1/3a 3,500.0 dong/piece, suit

Winter clothing 2a 3,500.0 dong/piece, suit

6 Ladies’ dress 4c 1,000.0 dong/piece

7 Suit 4a 2,000.0 dong/suit

8 Underwear 9a 500.0 dong/piece

9 Children’s clothing Item B 150.0 dong/piece, suit

10 Sport suit 8d 2,000.0 dong/suit