Vietnam: Rotation mechanism for leading role in rice export business

Circular No. 30/2018/TT-BTC of the Ministry of Finance of Vietnam stipulates the rotation mechanism for leading role in rice export to markets under centralized contracts as follows:

1. The rotation mechanism for leading role applies in case there are two rice exporters or more designated to play the leading role for an export market under a centralized contract but only one exporter is allowed to bid to supply rice and conclude the centralized contract after winning the bidding as requested by a regulatory authority or authorized importer of the importing country.

2. Procedures of the rotation mechanism for leading role are as follows:

- Within 01 day from the receipt of the notification of rice import from the importing country, the leading exporter in his/her turn shall submit reports to the Ministry of Industry and Trade and the Vietnam Food Administration on his/her capacity to win the bidding.

- If the leading exporter refuses to participate in the bidding in his/her turn, he/she must provide written reasons for such refusal to the Ministry of Industry and Trade, and inform the Vietnam Food Administration and other leading exporter(s) of such refusal.

- Within 01 day from the receipt of the written notification of refusal to participate in the bidding from the leading exporter in turn, the other leading exporter in his/her turn shall reach an agreement with the Vietnam Food Association on his/her participation in the bidding.

- In this case, the exporter who conducts transactions or participates in the bidding instead of the leading exporter in his/her turn as regulated shall not lose his/her turn and is allowed to participate in the following bidding according to his/her official turn.

- If all of designated leading exporters refuse to participate in the bidding, the Vietnam Food Association shall submit a report which specifies reasons for refusal to participate in the bidding by leading exporters and proposes other exporters qualified to participate in the bidding to the Ministry of Industry and Trade.

- The exporter participating in the bidding may request the Ministry of Industry and Trade to assist the completion of relevant procedures, if necessary.

3. Allocation of rice export quotas to leading exporters according to rotation mechanism:

Leading exporters following the rotation mechanism are allowed to directly export 20% of the rice quantity specified in the signed centralized contract, in which, the leading exporter that is a party of the centralized contract is allowed to supply 2/3 of that 20% of the rice quantity specified in the centralized contract, and the remains are supplied by other leading exporters.

More details can be found in Circular No. 30/2018/TT-BTC of the Ministry of Finance of Vietnam, which takes effect from November 15, 2018.

- Thanh Lam -

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