Tiếng Việt| THE COUNCIL OF MINISTERS | SOCIALIST REPUBLIC OF VIET NAM |
| No. 49-HDBT | Hanoi, March 4, 1991 |
ON THE TRANSFER OF FOREIGN TECHNOLOGY INTO VIETNAM
THE COUNCIL OF MINISTERS
Pursuant to the Law on Organization of the Council of Ministers of the Socialist Republic of Vietnam dated 4 July 1981 ;
Pursuant to the Law on Foreign Investment in Vietnam, dated 29 December 1987 and the Law on Amendment and Addition to the Law on Foreign Investment in Vietnam, dated 30 June 1990;
Pursuant to the Ordinance on the Transfer of Foreign Technology into Vietnam dated 10 December 1988 ; and
On the Proposal of the Chairman of the State Committee of Science.
DECREES
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Participants in the transfer of technology :
1. The transfer of technology referred to in clause 1 of article 2 of the Ordinance means;
- Foreign legal entities (economic, financial and scientific organizations; companies and enterprises);
- Non-governmental organizations;
- Foreign individuals;
- Enterprises and corporations with foreign owned capital which are Vietnamese legal entities; and
- Overseas Vietnamese.
2. The transferee of technology referred to in clause 2 of article 2 of the Ordinance means;
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- Enterprises and corporations with foreign owned capital which are Vietnamese legal entities; and
- Vietnamese individuals.
Contents of technology transfer :
The following are transfers of technology :
1. The transfer of ownership or the right to use all types of industrial property, including:
- Inventions;
- Industrial designs;
- Trade marks;
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The buying and selling of trade without the transfer of the associated industrial property rights shall not constitute a transfer of technology.
2. The transfer through the purchase, sale or supply of the following (with or without equipment) :
- Technical know-how;
- Technological projects and processes;
- Preliminary designs and technical designs;
- Formulate, drawings, graphs, diagrams, charts; and
- Other technical knowledge and expertise.
3. The provision of the following forms of consultancy of support services:
- Technical support, selection of technology, instructions for the installation of equipment, trial operations of various types of technology;
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- Consultation in relation to technology management; organization and operation of production and technology processes;
- Training and improvement of the professional, technical and managerial skills of administrators, technicians and other workers; and
- Support services in relation to the collection, processing and supply of information on markets, technology, law, resources and the environment.
The importing of conventional machinery, equipment, and materials shall not be considered to amount to the transfer of technology and shall not fall within the areas covered by the Ordinance.
Basic requirements of technology to be transferred into Vietnam :
1. Technology to be transferred into Vietnam shall be obliged to achieve at least one of the following :
(a) The raising of the technological level of production by :
- Increasing labour productivity;
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- Improvement in design and in product quality ; or
- Creation of new products to satisfy local consumption and export requirements.
(b) The efficient exploitation of local resources such as raw materials and fuel; job creation and employment of available manpower; or the exploitation and development of recyclable resources.
2. Technology to be transferred shall be guaranteed :
(a) Not to result in any effects which may be detrimental to the environment such as :
- Land, water or air pollution;
- Damage to natural fauna and flora;
- Ecological imbalances ; and
- Damage to the cultural and social aspects of populated areas.
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It, due to the nature of the technology transferred, any of the above effects appear which are detrimental to the workers or to the environment, the two parties to the technology transfer shall devise appropriate remedial measures. These measures shall be considered to be part of the technology to be transferred and shall be explained in detail in the relevant technology transfer contracts.
The written contract document shall serve as the basis upon which each party may perform its undertakings, shall guarantee the legal requirements for the import of technology, equipment, payment, and the settlement of disputes.
Principal provisions to be included in technology transfer contracts :
All technology transfer contracts shall include the following principal information :
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2. Definitions of terms used in the contracts.
3. Details of technology to be transferred:
- Name (technology or business);
- Detailed description of principal contents (according to the classification of the contents of the technology to be transferred as defined in article 3 of Chapter I);
- Technical and economic value of each item of technology to be transferred ; and
- Results estimated to be achieved following, completion of the technology transfer (economically, technically, socially).
4. Provisions which relate specifically to industrial property rights, including the supply of documents which describe the industrial property and all other legal documents which certify the industrial property rights as being protected.
5. Time, schedule and place at which the technology is to be provided.
Where the technology is transferred with accompanying equipment, there shall be included a list of that equipment, details of and plans for the delivery of each type of equipment.
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6. Payments :
Prices, conditions and modes of payment (including type of currency to be used, place where payment is to take place, time limits and percentages).
Where the technology to be transferred consists of a number of different items it is necessary to stage clearly the mode by which each item will be paid for in accordance with the contract.
Where item or part of the technology transferred is no longer valid (due to the expiry of a protected industrial property right or to the technical know-how becoming public information), the parties shall negotiate further the provisions in relation to payment.
7. Undertakings shall be made by both parties in relation to the following:
- Quality of technology
- Reliability of technology
- Duration of guarantees
- Guarantee of confidentiality during the validity of the project
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- Other undertakings of the two parties necessary to ensure that the transfer of technology is problem free.
8. Necessary training programs in relation to the transferred technology :
- Responsibilities of the two parties for training;
- Form, contents and areas of training;
- Duration, and location of training;
- Training expenses and other related provisions ; and
- Objectives and level of skills to be achieved from training.
9. Duration of contracts and provisions allowing changes to be made by the parties to the duration or expiry of them.
10. Issues in relation to disputes arising from contracts :
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- Method of resolution to be adopted ; and
- Bodies to be used in the resolution of disputes.
Provisions not to be included in contracts :
The following provisions shall not be included in contracts.
1. Provisions which compel the transferee of technology to buy or conditionally receive the following objects (in terms of quantity, quality and specifications) from the transferor or party appointed by the transferor:
- Raw materials, other materials;
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- Intermediate products; and
- Unskilled labour.
Specific guarantees which are required for the technology, in terms of resources, materials, accessories, capital goods or skilled manpower with technical expertise shall be explained in detail and agreed to by both parties.
2. Provisions which compel the transferee of technology to agree to and abide by specified limits in relation to the following :
- Scope of production and quantity of products (or groups of products) to be produced over a specified period of time;
- Prices, volume and area of product consumption ; or
- Appointment of sales agents or commercial representatives and the activities of and relationship between the transferee of technology and those agents and representatives.
3. Provisions which restrict the export market of the transferee of the technology by :
- Specifying those markets which may not be exported to ;
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- Specifying the volume and composition of the groups of products which are to be exported to a particular market during a particular time period.
Where the transferor of the technology is producing and consuming a similar product in a particular market, or has granted a license to a third party for the exclusive use of the industrial property rights (monopoly license) thereby enabling them to receive technology similar to that being transferred, the production and export of products shall take place in accordance with the agreements contained in the contracts and in accordance with the Vietnamese laws and international conventions on industrial property rights to which Vietnam is a party.
4. Provisions which provide that the transferee of technology shall not research and develop further the technology transferred or receive similar technology from other sources.
5. Provisions which prohibit the transferee of technology from utilizing freely the technology after the duration of the contract or the industrial property rights contained in the contract have expired.
Where special circumstances exist (due to the nature of the technology transferred, or to the state of the national economy) the authorized State body in charge of technology transfers may consider and allow one or more of the restrictive provisions referred to above, to be included in the contract.
Price of the technology to be transferred:
The price of the technology to be transferred shall be agreed upon by the two parties on the basis of equality and mutual benefit. Price fixing procedures shall accord with the value of the technology, and the prices and price fixing procedures of similar technology in international markets at the time of calculation.
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Payment may be made by either package payment, installment payment or a combination of both. The amount of "installment payments" depends on the nature of technology, but shall not in total exceed by five (5) per cent or more the net selling price of the products produced or the services provided as a result of the technology transferred.
The two parties may agree upon the currency to be used for payment or for payment to be made in kind. All payments made in cash and cash transfers shall take place in accordance with the regulations of the State of Vietnam.
Where payments are made in kind (goods) then depending on the nature of the goods involved (whether or not they are included in a quota), the two parties shall clearly define this method of payment in the contract and shall carry it out in accordance with the regulations of the management of export and import business of the Council of Ministers of Vietnam.
1. The duration of a contract is the period of time for which it is valid commencing from the time of approval and issue of a license for technology transfer by either the authorized Vietnamese body in charge of technology transfer or the bodies invested with such power, as referred to in articles 15 and 20 of this Decree.
2. The duration of the contract shall be determined and agreed upon by the two parties, but shall be no longer than seven years.
3. The authorized State body in charge of technology transfers may, in special circumstances at the request of the two parties, approve of contracts the duration of which are longer than seven years.
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If, during the performance of a contract, the transferor or transferee of the technology creates some improvement or innovation in relation to the technology transferred, each party may officially request that the other party inform it of the existence and preliminary contents of these changes and, where necessary, propose official negotiations aimed at the purchase or receipt of the improvements and innovations.
Supply of improvements and innovations in the technology transferred :
1. Upon being requested to supply information on improvements and innovations, each party shall be responsible to transfer the information to the other party first, on the basis of agreement, equality and mutual benefit.
In the event that one party deliberately fails to transfer, brings undue pressure to bear on the other party, or transfers the innovations and improvements to a third party on more favorable conditions thereby causing material damage to the other party, the other party may officially request that the authorized State body in charge of technology transfer intervene or treat it as a dispute arising under the contract and which shall be resolved in accordance with article 14 of this Decree.
2. The transfer of improvements or innovations shall be effected in the same manner as the ordinary transfer of technology and may be done by way of a new technology transfer contract or supplementary technology transfer contract in accordance with the terms contained in the original contract.
1. The parties shall attempt to resolve all disputes which arise during the performance of the contract by negotiation and reconciliation.
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- The Foreign Trade Arbitration Council affiliated to the Vietnamese Chamber of Commerce and Industry or an arbitrator of a third country or international arbitration; or
- An arbitration council mutually agreed upon by the two parties.
MANAGEMENT AND APPROVAL OF TECHNOLOGY TRANSFER CONTRACTS.
The power to approve technology transfer contracts is delegated in accordance with article 20 of this Decree.
Application for approval of technology transfer contracts :
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When applying for approval of a contract, the two parties shall submit the following documents :
1. An application for the approval of a contract completed in accordance with official printed form of the State Committee for Science.
2. The technology transfer contract and all attached appendices.
3. A feasibility study.
The feasibility study may be made by either party and must contain the justifications for the contract, supplements to analyses and calculations regarding markets, materials, technology, economy, finance and efficiency of technology transfer.
4. Information ensuring the status of each party as a legal entity, their property rights and all other necessary details in relation to the two parties participating in the technology transfer contract, such as :
- Name and address of the company;
- The guarantor or sponsoring organization;
- Bank, account number, capital; and
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The languages to be used in the contract and all attached documents shall be Vietnamese and a widely used foreign language agreed upon by the two parties in the contract. Both versions shall be equally valid.
Decision to approve contracts:
The State Committee for Science or bodies to which the power to approve technology transfer contracts has been delegated shall, within three months of receipt of the application referred to in the provisions of article 16 of this Decree, communicate its decision to approve of or refuse the technology transfer contract.
The communication of approval shall be effected by the issue of the technology transfer license. The State Committee for Science shall publish official forms of technology transfer licenses to be used in relation to all kinds of technology transfer contracts.
False statements and dealing with false statements :
1. Where Vietnamese State bodies have sufficient evidence that a false statement has been made, the license permitting technology transfer shall be withdraws and the contract automatically declared invalid.
Where the contract is invalid, the market of the statement shall be responsible for all economic and financial consequences which flow as a result.
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Technology transfer contracts may be subject to additions, amendments, or cancellations in part provided that both parties unanimously agree and send a written proposal to the body which originally approved the contract and granted the technology transfer license. The body shall then within one month of receiving the parties' request to change the contract, deliver its findings in writing.
The additions, amendments, and cancellations in part of the contract shall be effective only when the findings referred to above are made known.
Delegation of power to approve technology transfer contracts :
The delegation of power to approve of technology transfer contracts in accordance with article 18 of the Ordinance is designed to create favorable condition for ensuring the timely signing and implementation of the contracts.
1. The State Committee for Science shall study, investigate, decide, approve of and issue licenses in respect of the following contracts :
- Contracts worth more then one million (1,000,000) US dollars (regardless of the source from which they are paid);
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- Contracts of branches which require national security guarantees such as national defense and interior affairs; and
- Contracts which may have exceptional consequences.
2. The Ministries, other State Committees and bodies under the Council of Ministers, people's committees of the provinces, towns and special zones under central authority shall, after consulting the State Committee for Science, study, investigate, decide, approve of and issue licenses in respect of the following contracts :
- Contracts worth less than one million (1,000,000) US dollars which are financed by means other than the State Treasury; and
- Contracts worth less than five hundred thousand (500,000) US dollars which are financed by the State Treasury.
3. The approval of all technology transfer contracts which are within the framework of foreign investment shall take place in accordance with the articles contained in Chapter V of this Decree.
After a decision to approve and grant a license in respect of a contract has been made, the Ministries or Committees concerned shall, within two weeks, copy and send all relevant documentation to the State Committee for Science.
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Managing and guiding the implementation of contracts :
The State Committee for Science shall be responsible for managing, storing and classifying all technology transfer contracts, for periodically informing all related bodies of matters necessary for the creation of favorable conditions for the implementation of contracts and for avoiding the import of any technology already in existence in the country.
The Ministries and the provincial people's committee shall monitor the performance of all technology transfer contracts approved and shall inform the Foreign Trade Bank concerned of matters necessary for the raising of foreign currency which is required where payment is made by installments. This monitoring shall assist in evaluating the standard of handling of the technology transferred, particularly when extensions to contracts are being considered.
RIGHTS AND OBLIGATIONS OF THE CONTRACTING PARTIES IN THE TRANSFER OF TECHNOLOGY
Taxes on transfer of technology :
1. The transferor of technology shall in accordance with the taxation laws of Vietnam in force at the time pay income tax and import duty on all machinery and equipment which is related to the transfer of technology.
2. In order to encourage the transfer of foreign technology into Vietnam, the transferor shall be exempt from all income tax for a period of three years from the date of promulgation of this Decree.
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TECHNOLOGY TRANSFER IN FOREIGN INVESTMENT
The following shall be considered to continue technology transfers in foreign investment:
1. Technology transferred by a foreign party in the form of capital contribution in whole or in part for the establishment of an enterprise of joint venture enterprise with a Vietnamese party in accordance with the Law on Foreign Investment in Vietnam.
2. Technology transferred by a foreign party in the form of capital contribution in whole or in party to a business co-operation contract entered into with a Vietnamese party in accordance with the Law on Foreign Investment in Vietnam.
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After the issue of licenses, the State Committee for Co-operation and Investment shall copy and send to the State Committee for Science the particular sections relevant to the technology transfer contract.
This Decree shall be of full force and effect as of the date of its promulgation.
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FOR THE COUNCIL OF MINISTERS
VICE CHAIRMAN
Vo Van Kiet