The Right to Entrust the Sale and Purchase of Goods by FDI Enterprises

During the process of researching the issue of entrusted rights for the purchase and sale of goods and transit of FDI enterprises, IPIC Law Co., Ltd. encountered the following problem:

According to Clauses 1, 2, Article 3, and Article 14 of Decree No. 187/2013/ND-CP dated November 20, 2013, by the Government of Vietnam on the implementation of the Commercial Law stipulating international goods trading and agency activities for purchasing, selling, processing, and goods transit with foreign countries:

“Article 3. Rights to conduct export and import business

1. For Vietnamese traders without foreign direct investment (hereinafter referred to as traders): Except for goods listed in the List of goods banned from export, temporarily suspended from export, the List of goods banned from import, and temporarily suspended from import stipulated in this Decree and other legal documents, traders are allowed to export and import goods irrespective of their registered business lines…

2. For traders with foreign direct investment, foreign companies, and branches of foreign companies in Vietnam: When conducting commercial activities within the scope of this Decree, in addition to complying with the provisions of this Decree, must also comply with other related laws, commitments of Vietnam in international treaties that the Socialist Republic of Vietnam is a member, and the roadmap announced by the Ministry of Industry and Trade…

Article 14. Transit of goods Traders are allowed to conduct transit of goods according to the following regulations:

1. Except for goods specified in Clause 2 of this Article, other types of goods are allowed to be traded via transit method; the transit procedures at Vietnamese border gates are resolved at the Border Gate Customs Sub-department…”.

According to Decree No. 09/2018/ND-CP by the Government of Vietnam detailing the Commercial Law and the Law on Foreign Trade Management regarding the purchase and sale of goods and directly related activities by foreign investors, economic organizations with foreign investment in Vietnam replacing Decree No. 23/2007/ND-CP, the temporary import for re-export and transit activities are not stipulated in this Decree.

Based on the guidance in Official Dispatch No. 6321/BCT-XNK dated June 29, 2010, by the Ministry of Industry and Trade, “enterprises with foreign investment, including those with export rights and import rights, are only allowed to temporarily import goods to serve investment projects in Vietnam, and are not allowed to engage in the business of temporary import for re-export services and transit of goods through Vietnamese border gates.”

According to these regulations, IPIC Company understands that FDI enterprises do not have the right to transit goods. The company inquires whether FDI enterprises are allowed to entrust other enterprises to conduct the purchase, sale, and transit of goods.

Regarding this issue, the Import and Export Department, Ministry of Industry and Trade has the following opinion:

When joining the World Trade Organization (WTO), Vietnam did not commit to allowing economic organizations with foreign investment to conduct temporary import for re-export, transit trade, and entrustment for the purchase and sale of goods.

Therefore, economic organizations with foreign investment in Vietnam are not allowed to conduct temporary import for re-export, transit trade of goods, nor are they allowed to entrust temporary import for re-export and entrusted transit of goods.

For common export entrustment and import entrustment activities, economic organizations with foreign investment shall comply with the regulations in Decree No. 187/2013/ND-CP dated November 20, 2013, and Decree No. 09/2018/ND-CP dated January 15, 2018, by the Government of Vietnam.

According to the Government of Vietnam's online newspaper

>> CLICK HERE TO READ THIS ARTICLE IN VIETNAMESE