Machinery import rules worry firms

Wednesday, Sep 03, 2014 09:31

The production lines of  nokia phones in Bac Ninh. — Photo vietnamnet

HA NOI (Biz Hub) — The Prime Minister has agreed to postpone the implementation of a circular on importing used machinery, equipment and technology.

The move to reconsider the circular was made as domestic importers of used machinery said they may risk bankruptcy if the circular takes effect on September 1 as scheduled.

Experts also voiced concerns over stipulations that imported machinery, equipment and technology must be less than five years old.

In addition, the rule for machinery and equipment less than three years old is applied to those used for agricultural production, manufacture of beverages and postal services only, reports

According to Minister of Science and Technology Nguyen Quan, the country encourages the import of modern and high-technology machinery. However, used machinery must meet requirements of quality, safety and energy savings along with environmental protection standards.

The import of second-hand machinery will be allowed if its quality is 80 per cent as good as a new one, according to the Ministry of Science and Technology.

Meanwhile, Le Van Dinh, director of Minh Hanh Trading Ltd Co, was worried that before second-hand machinery is allowed into the country, all imported machines or equipment would be checked by the Local Quality Assurance and Testing Centre. In addition, before they are sold in the local market, importers have to repair at least 80 per cent of the second-hand machines and the users continue to maintain or repair them during their utilisation process. Dinh said that he did not agree with the authorised bodies that the import of second-hand machines and equipment could harm the environment.

He said most of the second-hand machines imported from the EU or Japan were durable, while new machines or equipment, often imported from China or Thailand, have poor quality and durability.

The used machinery can be utilised for another 15 to 20 years. Viet Nam was a poor country and we should not waste money, said Dinh. If Circular 20 is applied, his company and many others would go bankrupt.

Nguyen Thanh Son, director of the Van Phong Construction Equipment Co Ltd, said that the import price of some new machinery could range between VND11-12 billion (US$519,000-$566,000). Phong said with such high prices of new machinery, many importers would face bankruptcy. The domestic market would be dominated by new machinery manufacturers, thus leading to monopoly.

Bui Van Ly, a farmer in Bac Ninh Province, said that he purchased two used tractors for VND50 million each. Under the new circular, the price of a new tractor will be higher by three to four times. How could a farmer afford it, he asked.

Nguyen Vu Hai, a senior official of Viet Nam Registration, said that during his 20-year career, they could not decide how to determine whether the quality of used machinery is 80 per cent as good as a new one. He said if Circular 20 was implemented, the Ministry of Science and Technology must issue detailed instructions on how to identify whether a machine is 80 per cent as good as a new one.

On the other hand, the circular overlaps with regulations on product and commodity quality and some relevant decrees.

Professor Nguyen Mai, a senior economist, said the most important thing was that Viet Nam's companies need to know how to use technology appropriate to their development period. It was unrealistic to expect anyone to decide whether the quality of used machinery is 80 per cent as good as a new one.

According to Ministry of Science and Technology, this move is aimed at preventing the inflow of obsolete machinery and equipment which would turn the country into a landfill for the world's discarded technologies.

In 2012, the Government temporarily put a halt to the import of outdated second-hand machinery, equipment and production lines in response to information about the closure of 2,250 companies in China that used inefficient and outdated technology. — VNS

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