Vietnam - New Regulations Restrict Imports Of Used Machines, Equipment, And Technological Lines From 15 June 2019

Legal News & Analysis - Asia Pacific - Vietnam - Telecommunications, Media & Technology

1 June, 2019

 

Vietnam introduced new limits on the import of used machinery via Decision No. 18/2019/QD-TTg on the Import of Used Machinery, Equipment and Technological Lines ("Decision No. 18"). Businesses who import used machinery and equipment ("Used Machines") for use in Vietnam will need to demonstrate the machines will be used (1) directly in their Vietnam manufacturing, (2) are not more than 10 years old and (3) meet established environmental, technical and safety standards.1

 

Removal of exemption for investment projects and changes to the structure of the regulations

 

Decision No. 18 narrows the scope of used machinery imports into Vietnam. Previously, Used Machines imported as part of an approved investment project received an exemption from the 10-year age restriction.2 Decision No. 18 also narrows the scope of acceptable uses of Used Machines from 'manufacturing and trading' in Vietnam to 'manufacturing' only.

 

Businesses, who have already received an approval to import Used Machines under the aforementioned investment project exemption, will still receive an exemption.3 Decision No. 18 also reclassifies used goods imported into Vietnam as either used technological lines or used machinery and equipment. 4 Previously, used imports regulations classified imports as used equipment and machines or as used parts.

 

Applicable imports

 

Decision No. 18 applies to goods imported under Chapter 84-85 HS codes, which cover machinery and mechanical appliances, electrical equipment, sound equipment and television equipment.5

Decision No. 18 requires that all used imports be used in manufacturing activities in Vietnam.6 Additionally used imports must have been manufactured in accordance with Vietnam's National Technical Regulations (QCVN) on safety, energy saving, and environmental protection; or where inapplicable, manufactured in conformity with technical indicators of Vietnam’s Standards (TCVN) or Standards of G7 countries or Korea with regard to safety, energy saving, and environmental protection.7

 

Used technological lines

 

  • Remaining capacity for production or performance must be at least 85% of the original design;
  • Energy / raw material consumption shall not exceed 15% of the designed consumption level;
  • The relevant technology must be applied by at least 03 manufacturers of member countries of Organization for Economic Cooperation and Development (OECD);
  • Foreign inspection certificate valid for 18 months before import.

 

Used machinery and equipment

 

  • Age does not exceed 10 years;8
  • Importers who wish to import used machinery or equipment which exceeds the 10 year age limit may apply to the Ministry of Science and Technology ("MOST") for an exception 
  • Inspection certificate valid for 6 months before import.

 

Certain Used Machinery exempted from the application of Decision No. 18, including goods: 9

 

  • transited or transhipped;
  • temporarily imported for re-export;
  • imported to execute maintenance/repair contracts with foreign parties;
  • traded among enterprises, or comprising liquidated assets, in an export-processing zone or free trade zone;
  • transferred in relation to processing contracts involving foreign parties; or
  • meant to serve research and development and cannot be domestically manufactured; meant to serve national defense and security objectives at the request of relevant Ministries

 

Baker McKenzie

 

For further information, please contact: 

  

Thanh Vinh Nguyen, Partner, Baker & McKenzie

thanhvinh.nguyen@bakermckenzie.com

 

1 Decision No. 18/2019/QD-TTg on the Import of Used Machinery, Equipment and Technological
Lines, issued by the Prime Minister on 19 Aprial 2019, Art. 4(3)
2 Circular No. 23/2015/TT-BKHCN on Import of Used Machinery, Equipment and Technological
Lines issued by the Ministry of Science and Technology on 13 November 2013.
3 Supra note 1, Art. 16(3)
4 Ibid Art. 5 and Art. 6.
5 Ibid Art. 1.
6 Ibid Art. 1.
7 Ibid Art. 5 and Art. 6.
8 Decision No. 18 Annex 1 includes an enumerated list of used field machinery and equipment,
which may be imported so long as it is less than 15 - 20 years old.
9 Ibid Art. 2.​