The Vietnamese Government has issued a decree stipulating that Vietnamese traders are allowed to process legal goods for foreign merchants, excluding the commodities banned or temporarily suspended from export and import.

For 243 sectors considered relevant to state security and societal safety, including firearms, insurance, casinos, petrol and tax services, only the producers who fully meet the statutory conditions for producing and trading the listed products will be eligible to process them for export, according to the decree dated May 15, 2018.

As for the goods imported by designated traders under the management of the State Bank of Viet Nam (SBV), the processing of commodities will be implemented in accordance with the regulations of the SBV.

For goods that must be exported or imported under special permits, firms can only sign the processing contracts for foreign traders once they obtain appropriate licences from the Ministry of Industry and Trade.

The processing contracts must be consist of documents or other forms of equivalent legal value as stipulated by the Commercial Law. They must at least contain the following provisions: names and addresses of the signatories and the direct processing party; names and quantity of outsourced products; outsourcing prices; payment term and mode; the list, quantity and value of the imported materials, auxiliary materials and supplies, as well as the materials domestically produced for processing; norms on the use of materials; norms on the consumption and waste of materials in processing; list and value of the machinery and equipment leased, lent or donated for processing (if any); measures to deal with waste materials, wastes, and defective products, and the principles of handling the redundant borrowed machinery, equipment, surplus raw materials, auxiliary materials and supplies after the expiry of the processing contract; place and time of delivery; trademarks and appellations of origin; and certification of the validity of the contract.

The decree also stipulates that the processing merchants are exempt from import and export tariffs in accordance with provisions of the tax law and are entitled to hire other traders to conduct the processing. They also have to pay import and export tariffs for the raw materials, auxiliary materials and supplies purchased inside the country, while abiding by the provisions of Vietnamese laws on processing activities for exports, imports and domestic manufacture of goods, as well as the terms of the signed processing contracts. — VNS