General provisions on defense industry in Vietnam

General provisions on defense industry in Vietnam (Internet image)

The general provisions on defense industry in Vietnam are stipulated in Decree 46/2009/ND-CP as follows:

Criteria for an establishment to be recognized as a defense industry one:

• Being lawfully founded under a competent state agency's decision;

• Satisfying all conditions and completing all procedures for conducting defense industry activities under the Prime Minister's decisions;

• Receiving orders placed or plans assigned by the State for the production and supply of one or several products, product details or services for defense or security.

Entry of core defense industry establishments into joint ventures or partnerships:;

- Core defense industry establishments may enter into joint ventures or partnerships with domestic economic organizations of all economic sectors and foreign organizations and individuals to produce products for defense or security on the principle of voluntariness, equality and mutual benefit.

- All activities of entering into economic joint ventures or partnerships shall be conducted under lawful contracts.

- Core defense industry establishments are prohibited from selling, lending or leasing their legal entity status in economic activities.

- When entering into joint ventures or partnerships with foreign organizations and individuals to produce products for defense, core defense industry establishments shall abide by the provisions on international cooperation of Article 5 of the Ordinance on Defense Industry and Article 2 of Decree 46/2009/ND-CP. In entering into joint ventures or partnerships, it is necessary to:

• Clearly identify foreign partners through the verification by competent functional state agencies, especially in national security-related matters;

• Prioritize foreign investment in domains and branches in which defense industry establishments have advantages, domains which require high technologies or domains in service of both defense and economic activities.

More details can be found in Decree 46/2009/ND-CP, which comes into force from June 27, 2009.

Long Binh

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