Border gate transfer of goods in Vietnam

Border gate transfer of goods in Vietnam

I.DEFINITION

Refer to Article 30 of the Vietnam Commercial Law 2005, the concept of border gate transfer of goods under Vietnamese laws is specified as follows:
- Border gate transfer of goods means the act of purchasing goods from one country or territory in order to sell the goods to another country or territory outside the territory of Vietnam without conducting procedures for import into Vietnam and for export out of Vietnam.
- Border gate transfer of goods shall be conducted in the following forms:
+ Transportation of goods directly from the exporting country to the importing country without passing through the border gates of Vietnam;
+ Transportation of goods from the exporting country to the importing country via the border gates of Vietnam but without conducting procedures for import into Vietnam and for export out of Vietnam;
+ Transportation of goods from the exporting country to the importing country via the border gates of Vietnam and bringing the goods into bonded warehouses or into goods transit areas of Vietnam’s ports but without conducting procedures for import into Vietnam and for export out of Vietnam.

II.PROVISIONS ON BORDER GATE TRANSFER OF GOODS IN ACCORDANCE WITH ARTICLE 43 OF THE VIETNAM LAW ON MANAGEMENT OF FOREIGN TRADE 2017

1. Traders that wish to conduct border-gate transfer business involving goods on the List of goods banned from export or import; goods suspended from export or import; goods not yet permitted for circulation or use in Vietnam; or goods subject to management based on export quota, import quota, tariff quota or export or import permit must obtain a permit for border-gate transfer of goods, unless the goods are transferred not via Vietnamese border gates.

2. Traders are only required to carry out border-gate transfer procedures at border-gate customs offices for the goods other than those specified in Clause 1 of this Article.

3. Goods transferred via Vietnamese border gates shall be placed under customs supervision until they are actually exported out of the Vietnamese territory.

4. The Government shall detail this Article.

III GUIDANCE OF THE VIETNAM GOVERNMENT ON BORDER GATE TRANSFER OF GOODS ACCORDING TO ARTICLE 18 OF DECREE 69/2018/ND-CP DATED MAY 15, 2018
 

1.A Vietnamese trader is entitled to conduct border gate transfer of goods transactions as follows:

a) The trader must obtain the license for border gate transfer of goods  transaction issued by the Ministry of Industry and Trade if the goods to be temporarily imported are included in the list of prohibited or suspended exports and imports, goods not be freely sold and used in Vietnam; goods subject to export and import quotas, tariff-rate quotas or requiring export or import licenses, except for automatic export or import license. If the goods move from the exporting country to the importing country, without entering the Vietnam’s checkpoints, the trader is not required to obtain a license for border gate transfer of goods.
b) If the goods are not mentioned in Point a Clause 1 hereof, the trader is not required to obtain a license for border gate transfer of goods issued by the Ministry of Industry and Trade.

2.Foreign-invested business entities may not conduct merchanting trader transactions.

3.Border gate transfer of goods  transaction will be conducted according to two separate contracts: A purchase contract and a sales contract concluded with the foreign trader. The purchase contract may be concluded before or after the sales contract.

4.The goods under border gate transfer of goods transaction must be brought in and brought out of Vietnam at the same checkpoint area and subject to the inspections and supervisions carried out by the customs authority throughout such process.

5.The payment, under border gate transfer of goods, must comply with regulation on foreign exchange and guidelines of the State bank of Vietnam.

IV. PAYMENT OF BORDER GATE TRANSFER OF GOODS SHALL COMPLY WITH THE GUIDANCE OF THE STATE BANK IN CIRCULAR NO.02/2020/TT-NHNN OF MARCH 30, 2020.

Finally, refer to the guidance of the Vietnam Government, foreign-capital entities are not allowed to conduct border gate transfer of goods transactions. However, in order to carry out the border gate transfer of goods transactions, the foreign-capital entities may conduct entrustment agreement through the Vietnamese enterprises.

LAWYER VN LAW FIRM