On 19 April 2019, the Prime Minister issued Decision No. 18/2019/QD-TTg on import of used machinery, equipment and technological lines (“Decision 18”). Decision 18 was later amended and supplemented by Decision No. 28/2022/QD-TTg of the Prime Minister on 20 December 2022.
Generally, Decision 18 provides the basic principles for the import of used machines and technological lines into Vietnam, including:
(i) detailed definitions on machines and technological lines;
(ii) requirements of used machines and technological lines to be allowed to be imported into Vietnam;
(iii) procedures for the importation of used machines and technological lines in Vietnam with detailed provisions on works to do, timeline and application documents; and
(iv) inspection of used machines and technological lines with detailed provisions on the inspection certificate (where required) and eligible organizations to implement inspecting activities.
WHAT YOU MUST KNOW
1. First thing first, as the requirements and the procedures will differ between used machines and technological lines, it is important to identify the type of machine to be imported into Vietnam. According to Decision 18, while machinery and equipment are defined as a a complete structure comprised of parts, groups of parts, and components that are interconnected to operate to serve the intended purposes, technological line means ystem of machinery, equipment, tools and/or devices that are installed or interconnected on a fixed site according to a technological process or diagram to ensure synchronous operation serving manufacturing.
In other words, a single machine is treated as “machinery and equipment” under Decision 18 while technological line means two or more machines connected together to serve a purpose on a fixed site according to a technological process or diagram.
2. After the first round of identification, it is important to decide whether the used machine/technological line meets the requirements as set out in Decision 18. According to Decision 18, the main requirements for used machines/technological lines, among others, are as follows:
(i) Used technological lines:
– Remaining capacity (which is the number of products that the technological line produce in a given time period) or performance must achieve at least 85% of its design capacity or performance.
– The amount of raw materials or energy consumed by the technological line shall not exceed 15% of its design consumption level.
(ii) Used machines: Used machines’ age must not exceed 10 years. In some specific sectors, the maximum age can be 20 years to 25 years as specified under Decision 18 (as amended).
3. In terms of procedures, provided that the used machines/technological lines meet all the requirements as set out in Decision 18, apart from the required import documents under the Law on Customs, generally, the importer must submit to the competent customs authority the following additional documents:
(i) Copy of the latest Enterprise Registration Certificate affixed with the importer’s seal;
(ii) Inspection certificate issued by a duly licensed organization with the contents as set out in Decision 18;
(iii) Translated and legalized manufacturer’s certificate providing the manufacturing year and manufacturing standards applied to the used machine in case of the machine being manufactured in G7 countries or Korea (in case of used machine).
4. Special cases: In case an importer wishes to import used machine whose age exceeds the age limit regulated in Decision 18 where remaining capacity or performance of such a machine achieves 85% or above of its design capacity or performance, and amount of raw materials or energy consumed by that machine does not exceed 15% of its design consumption level to serve its manufacturing in Vietnam. The importer can seek approval from the Ministry of Science and Technology (MOST). Such an approval will be later used in the import documents. It is important to note that, in this case, the importer must thoroughly explain the necessity of the used machine to the MOST for the MOST to issue its approval.
WHAT YOU MUST DO
To ensure the compliance with the prevailing regulations on importation of used machinery, equipment and technological line, you must:
1. Obtain all information and documents you can about the used machine/technological line you intend to import, i.e. age, technology, components, manufacturer, country of origin, use of such a machine/technological line, and current status. All of these information must be carefully reviewed and assessed by all relevant parties before you decide to import such a machine/technological line;
2. Find your trusted inspection company. As the importation of used machine/technological line requires inspection certificate from a duly licensed company, you must find yourself a trusted and duly licensed company after you have decided that you will go through with your plan of importing used machine/technological line. It is worth noting that the list of duly licensed companies is published at the website of the MOST. However, it is advised that you or your advisor reach out to these companies first to carefully perform due diligence on these companies before you decide to go with one since each of these companies has experience and expertise in different types of machine/technological line;
3. FIND YOUR TRUSTED LEGAL ADVISOR. A capable legal advisor can support you from your decision-making phase of the import until you import your desired used machine/technological line into the border of Vietnam. Among others, a legal advisor can help you with:
(i) identifying the exact type of your desired machine/technological line;
(ii) identifying the requirements for such a machine/technological line;
(iii) along with the inspection partner, assessing the current conditions of such a machine/technological line and assess the feasibility of the importation of such a machine/technological line;
(iv) monitoring your working process with the inspection partner and support on the legal aspect of such a process;
(v) preparing checklist of required documents and implementing necessary work with regard to the application documents for the import (i.e. drafting, reviewing, supporting on the translation/notarization, etc.); and
(vi) work with relevant parties (i.e. the MOST, the inspection company, the customs authoritiy) to ensure the compliance of the import.
From mid-2023 until mid-2024, Duane Morris Vietnam supported a client with its plan to import a used technological line from Germany. During this engagement, Duane Morris Vietnam’s scope of work covers the support from legal aspect for the client’s business plan from start to finish, including reviewing and assessing the technological line, finding the suitable inspection company and taking care of legal matters between the client and such company, reviewing documents and application documents related to the import, providing comprehensive advice to the client with legal aspect of the import. With Duane Morris Vietnam’s support, the technological line was issued with the appropriate inspection certificate and was ready to be imported into Vietnam for the client’s business.
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Please do not hesitate to contact Oliver Massmann under omassmann@duanemorris.com if you have any questions or want to know more details on the above. Oliver Massmann is the General Director of Duane Morris Vietnam LLC.
Thank you!