Ordinance on the transfer of foreign technology into Vietnam
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11-01-2007
STATE COUNCIL ---- No. 101 CT/HDNN THE SOCIALIST REPUBLIC OF VIETNAM Independence-Freedom-Happiness. ****
ORDER OF THE STATE COUNCIL OF THE SOCIALIST REPUBLIC OF VIETNAM *****
Pursuant to Article 100 of Constitution of the Socialist Republic of Vietnam and pursuant to Article 34 of the Law on Organization Assembly and the State Council
PROMULGATES:
The Ordinance on the Transfer of Foreign Technology into Vietnam passed through the State Council of the Socialist Republic of Vietnam on 5 December 1988 Hanoi, 10 December 1988
On behalf of the State Council of the Socialist Republic of Vietnam Chairman VO CHI CONG
ORDINANCE ON THE TRANSFER OF FOREIGN TECHNOLOGY INTO VIETNAM *****
In order to constantly enhance the technology capabilities of the country and to promote socio-economic development in accordance with its policy of expanding economic, scientific and technological cooperation with foreign countries.
Pursuant to articles 16, 43 and 100 of the Constitution of the Socialist Republic of Vietnam.
This Ordinance sets forth the provisions regulating the transfer of foreign technology into Vietnam.
Chapter I General Provisions
Article 1:
The Socialist Republic of Vietnam encourages foreign organizations and individuals to transfer technology into Vietnam on the basis of equality and mutual benefit.
The Socialist Republic of Vietnam guarantees the rights and legal interests of foreign organizations which and foreign individuals who transfer technology into Vietnam, and creates favorable conditions for the transfer.
Article 2:
For the purpose of this Ordinance, the following terms shall have the meanings described hereunder:
1. The transferor of technology means a party consisting of one or more foreign economic, scientific, technological or other organizations enjoying the status of legal person or foreign individuals transferring technology into Vietnam.
2. The transferee of technology means a party consisting of one or more Vietnamese economic, scientific, technological or other organizations enjoying the status of legal person or individuals receiving the technology being transferred into Vietnam.
3. The two parties means the transferor and the transferee of technology.
Article 3:
The following activities are regarded as the transfer of technology:
1. Transfer of utilization or ownership rights of patents, licences, utility models or other industrial property right;
2. Transfer of know-how or specialized technical knowledge in the form of technical solutions, design documents, formula, and technical specifications with or without equipment;
3. Provision of technical assistance and consultancy services, including training and the supply of information.
Article 4:
In the transfer of technology into Vietnam, the following requirements shall not be violated:
1. It shall improve technological standard, production efficiency and the quality of products or create new products.
2. It must not be detrimental to the safety of production
3. It shall make rational use of energy, natural resources, and work force
4. It shall not damage the environment The Government of the Socialist Republic of Vietnam will announce the sectors in which priority shall be given to the transfer of technology.
Chapter II Technology transfer contracts
Article 5:
Any transfer of technology which is commercial by nature or which involves the rights and obligations shall be carried out pursuant to a written contract.
Article 6:
A technology transfer contract shall contain the following principal clauses:
Objects of the technology transfer: name, content, technological specifications and results to be achieved;
Price, terms, and mode of payment;
Place, time, and schedule for transfer;
Details concerning industrial property rights;
The effective duration of the contract and conditions for its amendment and termination;
Undertaking, of the two parties in respect of quality, reliability, guarantees, confidentiality of the technology, and other guarantees for the non-existence of defects in the technology and its transfer;
Training related to the technology transfer;
The procedures to be applied in the settlement of disputes which may arise from the implementation of the technology transfer contract; laws applicable to the settlement of disputes.
Article 7:
Unless being permitted by an authorized State body of Vietnam, the following restrictive clauses shall not be permitted in the contract.
1. Obligations on the technology transferee to purchase raw materials, equipment, intermediate goods and parts or to permanently use workforce from sources indicated by the transferor.
2. Restrictions concerning quantity of production of the transferee including the appointment of sales agents of trade representatives.
3. Restriction on the markets to which the transferee may export their products, other than those markets in which the transferor already manufactures or sells similar products, or has granted a exclusive licence to a third party.
4. Restrictions on the research and development of transferred technology by the transferee or on the acquisition of similar technology from other sources.
Article 8:
The price of the transferred technology shall be negotiated upon between the parties
Article 9:
The method of payment shall be negotiated upon between the parties and may be a lump sum or royalties, or a combination of the both.
Article 10:
The duration of the contract shall not exceed seven years from effective date of the contract. In case of necessity, prolongation to the contract may be permitted by the authorized Sate body.
Article 11:
During the performance of a contact, either of the parties may request the other to inform it of details of improvements and innovations related to the transferred technology which have been created by the other party.
In case one of the parties is interested in the improvements and innovations referred to paragraph 1 of this Article, the other party shall be obliged to transfer required improvements or innovations on the basis of reciprocity.
Article 12:
All disputes between the two parties arising out of the implementation of a contract shall first be resolved by negotiation.
In case that the two parties to the dispute fail to reach and agreement, the dispute shall be referred to an economic arbitration or judicial body negotiated upon in the contract.
Chapter III Approval of Technology Transfer Contracts
Article 13:
A technology transfer contract goes into effect only after being approved. The application for approval may be either the transferor, the transferee or both.
Article 14:
For the purpose of approval of the contract, the following documents shall be submitted to the authorized State body of Vietnam:
1. An application for approval
2. A contract of technology transfer and its attached annexes
3. A document justifying the objectives and feasibility of the technology to be transferred
4. Information concerning the legal status of the two parties The contract and enclosed documents shall be written in both Vietnamese and a widely used foreign language agreed upon by the two parties. The Vietnamese and the foreign language versions are equally valid.
Article 15:
The authorized body notifies its approval of the contract within three months of receiving the complete application documents referred to Article 14 of this Ordinance. The decision of approval is given in the form of a Technology Transfer Certificate.
Article 16:
Where any false statement is discovered in the application made by either or both of the parties, the technology transfer certificate may be revoked, in which case the contract shall automatically become invalid.
Article 17:
The parties may agree to amend, add to, terminate or extend the duration of the contract. These modifications with come into effect only upon the approval by the Vietnamese authorized State body.
Article 18:
The Council of Ministers issues regulations concerning hierarchy of approving of the technology transfer contracts and appoints the authorized State body to approve technology transfer contracts.
Chapter IV
Rights and Obligations of the Parties to Technology Transfer contracts
Article 19:
The Government of the socialist Republic of Vietnam issues policies and takes measures encouraging technology transfer and privileges in cases of priority.
Article 20:
Taxes are imposed in relation to technology transfers in accordance with the legal documents on taxation of Vietnam
Article 21:
A transferor of technology may remit payments, in the form of currency or in kind, as agreed upon in the contract by the two parties
Article 22:
The transferor or transferee of technology is given a right to ask for incentives or privileges in his application to the authorized State body for approval of the contract, or later.
The authorized State body decides, within two months of receiving the application, to accept or reject such requests for incentives or privileges.
Chapter V Final Provision
Article 23:
The Government of the socialist Republic of Vietnam will, pursuant to the provisions of this Ordinance, issue regulations to facilitate the transfer of technology into Vietnam by overseas Vietnamese, as their contribution to national development.
Article 24:
This Ordinance does apply to the transfer of technology which takes place within the framework of agreements on scientific and technological cooperation or assistance between the Government of Vietnam and foreign government, except where those agreements provide otherwise.
Article 25:
The Council of Ministers issues detailed provision for the implementation of this Ordinance.
On behalf of the State council of the Socialist Republic of Vietnam President VO CHI CONG
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