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THE MINISTRY
OF TRADE
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SOCIALIST
REPUBLIC OF VIETNAM
Independence- Freedom- Happiness
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No.1447/1999/QD-BTM
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Hanoi,
December 10, 1999
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DECISION
ISSUING THE REGULATION ON THE LEASE OF
FOREIGN MACHINERY AND EQUIPMENT
THE MINISTER OF TRADE
Pursuant
to the Commercial Law of May 10, 1997;
Pursuant to the Government's Decree No.95/CP of December 4, 1993 defining the
functions, tasks, powers and organizational structure of the Ministry of Trade.
DECIDES
Article 1.- To issue together with this Decision
the Regulation on the lease of foreign machinery and equipment.
Article 2.- This Decision takes effect 15
days after its signing.
Article 3.- Organizations and individuals
that lease foreign machinery and equipment and the relevant State management
agencies shall have to implement this Regulation.
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FOR THE
MINISTER OF TRADE
VICE MINISTER
Mai Van Dau
REGULATION
ON THE LEASE OF FOREIGN MACHINERY AND
EQUIPMENT
(Issued together with Decision No.1447/1999/QD-BTM of December 10, 1999 of
the Minister of Trade)
Chapter I
GENERAL PROVISIONS
Article 1.- Scope of regulation
This Regulation regulates the lease of foreign
machinery and equipment in service of production and/or processing of goods for
foreign countries, and construction of domestic investment works.
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Article 2.- Interpretation of terms
- The lease of foreign machinery and equipments
an activity whereby a foreign party leases machinery and/or equipment to a
Vietnamese party under a machinery and/or equipment leasing contract to be used
for given purposes and in a specifie dperiod.
- The lessor of machinery and/or equipment is
the foreign party, that may be a foreign organization or individual.
- The lessee of machinery and/or equipment is
the Vietnamese party, that may be a Vietnamese organization or individual:
+ Lessees of machinery and/or equipment for
production and construction: Enterprises established under the laws of Vietnam.
+ Lessees of machinery and/or equipment for
processing: Vietnamese traders according to the Commercial Law.
- Leased machinery and equipment may be single
or complete machinery and equipment, production lines, construction machines,
special-use vehicles and tools.
Article 3.- Machinery and equipment
leasing conditions
1. For leased machinery and equipment
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- They must comply with the provisions of
Vietnamese laws on the import of used machinery and equipment (if they are used
machinery and equipment), on labor safety, environmental protection and other
relevant provisions.
2. For lessees of machinery and equipment:
- They must have production investment projector
plans (economic technical feasibility studyal ready approved by the competent
authorities, or have signed processing contracts with foreign traders.
Article 4.- Financial matters
1. The lessees shall pay import tax on the
leased machinery and equipment as prescribed in the Finance Ministry's Circular
No.172/1998/TT-BTC of December 22, 1998 guiding the implementation of the
Government's Decree No.94/1998/ND-CP of November 17, 1998 detailing the
implementation of the Law on Import Tax and Export Tax and the laws amending
and supplementing a number of articles of the Law on Import Tax and Export Tax.
2. The lessees shall pay for the lessors the
enterprise income tax and other financial obligations as prescribed in the
Finance Ministry's Circulars No.169/1998/TT-BTC of December 22, 1998 on the tax
regime applicable to foreign organizations and individuals conducting business
activities in Vietnam other than any investment forms prescribed in the Law on
Foreign Investment in Vietnam and No.95/1999/TT-BTC of August 6, 1999 amending
and supplementing Circular No.169/1998/TT-BTC of December 22, 1999.
Article 5.- Contracts for lease of
machinery and equipment
A contract for lease of machinery and/or
equipment must contain the following contents:
- The names and addresses of the machinery
and/or or equipment lessor and lessee;
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- The purpose of the lease of machinery and/or
equipment;
- The leasing price of machinery and/or
equipment;
- The leasing term;
- The mode of payment;
- The mode of delivery;
- The time of delivery;
- Rights and obligations of the concerned
parties;
- Remedies;
- Dispute settlement.
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- Contract liquidation.
Chapter II
RIGHTS AND OBLIGATIONS OF
THE LESSOR AND LESSEE OF MACHINERY AND EQUIPMENT
Article 6.- Rights and obligations of the
lessor
1. To be entitled to request the lessee to pay
compensation for damage caused by the latter’s failure to fully comply with the regulations on use of
the machinery and/or equipment, fulfill the maintenance and repair duties and
pay the rent as provided for in the contract for the lease of machinery and/or
equipment.
2. To be entitled to recover the leased
machinery and/or equipment if the lessee breaches the contract provisions
agreed upon by the parties, which leads to cancellation of the contract.
3. To be entitled to receive the rent in a
freely convertible foreign currency.
4. To be obliged to buy insurance for the leased
properties.
5. To be obliged to provide guidance for
installation and test run of the machinery and/or equipment, supply spare parts
and provide warranty for the machinery and/or equipment.
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Article 7.- Rights and obligations of the
lessee
1. To be entitled to purchase the leased
machinery and equipment in accordance with the provisions of Vietnamese laws on
the import of machinery and equipment.
2. To use the leased machinery and equipment for
the right purpose as agreed upon in the contract.
3. To bear all risks of loss and/or damage of
the leased machinery and/or equipment, except for risks due to force majeure
events.
4. To be responsible for maintaining and
repairing the machinery and/or equipment during the leasing term.
5. Not to transfer or sub-lease the machinery
and/or equipment without the written consent of the lessor.
6. Not to mortgage or pledge the leased
machinery and/or equipment.
7. To be obliged to pay the rent as agreed upon
in the contract.
8. To re-export the leased machinery and
equipment when the machinery and/or equipment leasing contract ceases to be
effective.
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1. The lessor may terminate the contract ahead
of time in the following cases where the lessee.
a/ Fails to pay the rent as agreed upon in the
contract;
b/ Breaches the commitments made in the contract
regarding the preservation and maintenance of the machinery and/or equipment,
transfers or sub-leases them without the lessor’s consent.
c/ Is insolvent, bankrupt or dissolved.
d/ Has no substitute guarantor, for cases where
the lessee has a guarantor that has become insolvent, bankrupt or dished.
2. The lessee may terminate the contract ahead
of time in one of the following cases:
a/ The leased machinery and equipment are not
delivered on time as agreed upon in the contract;
b/ The lessor breaches its commitments made in
the contract regarding the quality and technical specifications of the
machinery and/or equipment, the capacity according to the technical design,
warranty, test run and pre-test acceptance.
Article 9. - Handling the termination of
contracts ahead of time
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2. Where a contract is terminated ahead of time,
the party that breaches the contract must pay compensation for all damage
caused to the other party.
Article 10.- Procedures for the import
and re-export of leased machinery and equipment
Basing themselves on the provisions in this
Regulation and the law provisions on the lease of foreign machinery and
equipment, the lessees of machinery and equipment shall fill in the procedures
for the import or re-export thereof at border-gate customs offices.
Article 11. - Liquidation of contract
The lessee and lessor of machinery and equipment
must liquidate the contract when it ceases to be effective or terminates ahead
of time.
The leased machinery and equipment may be
re-exported back to the lessor, transferred for performance of another leasing
contract, sold or demolished in Vietnam.
The re-export of leased machinery and equipment,
the transfer of the leased machinery and equipment for performance of another
contract or their demolition in Vietnam shall be dealt with by the customs
office.
The sale of the leased machinery and equipment
in Vietnam shall be dealt with by the Ministry of Trade according to the
current law provisions on import of machinery and equipment.