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Viet Nam
Industrial Park Situation
Text by Saito Hiroshi
The 21st: About the import of used machinery in Vietnam
1. Exporting from Japan
As a first step in Japan, when conducting regular sales and transfers to overseas subsidiaries, it is necessary to confirm whether the used machinery in question is subject to security trade control regulations, make the relevant determinations, and follow the necessary procedures at the Ministry of Economy, Trade and Industry.
2. Prohibited and regulated import items
In Vietnam, there are used machinery items that are prohibited or regulated for import. For used equipment belonging to HS Codes 84 and 85 that are not subject to import prohibitions, the previous Circular 23 of the Ministry of Science and Technology stipulated that import was only allowed if the equipment was no more than 10 years old and complied with Vietnam’s or the G7 countries’ standards for safety, energy efficiency, and environmental protection. In 2019, this was replaced by Prime Minister’s Decision 18 dated April 19, which relaxed some of the age restrictions, expanding the scope to include lathes and foundry machines manufactured within 20 years. The procedures for specially importing used machinery and equipment exceeding the age limits were also specified, with the Ministry of Science and Technology required to respond in writing on the approval or rejection within 15 business days. In addition to the safety, energy efficiency, and environmental protection standards, separate import criteria were established for used machinery/equipment and used production lines, requiring certification from designated inspection agencies that these requirements are met.
The Vietnamese government announced Prime Minister’s Decision 18 dated April 19, 2019, which regulates the import of used machinery, equipment, and production lines (Note 1). Previously, used machinery and equipment over 10 years old (Note 2) were restricted from being imported, but as of June 15, some of these age restrictions have been relaxed.
Prior to this, the import of used machinery, equipment, and production lines was generally only permitted if they were within 10 years of manufacture and met safety, energy efficiency, and environmental protection requirements, based on Circular 23 issued by the Ministry of Science and Technology. As a partial exception, imports were allowed for accompanying investment projects or with special approval, but the specific procedures were not clearly specified, leading to calls for improvement from Japanese companies and others.
In the current Prime Minister’s Decision 18 that replaces Circular 23, in addition to the criteria for safety, energy efficiency, and environmental protection (Note 3), separate import criteria have been established for used machinery/equipment and used production lines. Importers must provide a certificate issued by a designated inspection agency to prove that these requirements are met.
For the import of used machinery and equipment, the age limit has been relaxed for some items. The import of used lathes, casting machines and other metalworking equipment is now allowed for items up to 20 years old, expanded from the previous 10-year limit. Additionally, the procedures for specially importing used machinery and equipment exceeding the age limit have been clearly specified. The Ministry of Science and Technology is now required to provide a written response on the approval or rejection of such imports within 15 business days. This has improved the speed and predictability of the process, meeting the expectations of companies.
For the import of used production lines, the age limit has been eliminated. However, new numerical criteria have been introduced. The production line must have a remaining capacity of at least 85% of its original design output or efficiency, and its energy and other consumption rates must be no more than 15% of the original. Additionally, the technology of the production line must be in use in at least 3 locations within OECD member countries.
While the recent revisions have clarified certain procedures, there is still a possibility of issues arising during implementation. Therefore, for specific cases, it would be advisable to thoroughly consult with the Ministry of Science and Technology and customs authorities in advance before submitting the import application. This can help mitigate potential risks.
(★ Note 1) The products covered are those classified under HS Codes 84 and 85. A “production line” refers to a set of interconnected machinery and equipment that operate simultaneously as a connected system.
(★ Note 2) The age of the equipment is calculated by subtracting the year of manufacture from the year of import. For example, if equipment was manufactured in January 2008 and imported to a Vietnamese port in December 2018, the age would be 10 years.
(★Note 3) The equipment must comply with at least one of the following standards: Vietnamese National Technical Regulations (QCVN) Vietnamese Standards (TCVN) Standards set by the G7 countries (Japan, US, UK, Germany, France, Italy, Canada) Standards set by South Korea
3. Regarding quality inspection
If the goods in question are required to obtain quality certification in accordance with the industrial standards stipulated in Vietnam’s Quality Law (05/2007/QH12), the importer must follow the procedures required by Vietnamese laws, regardless of whether the goods are new or used. The procedures for obtaining the cargo inspection certificate are the responsibility of the importer. It is necessary to confirm the requirement for the inspection certificate before shipment. The pre-shipment cargo inspection service is provided by organizations such as the Japan Marine Survey Association.
4. Other points to note
For used machinery, it is generally the case that performance guarantees and after-sales service are not provided after export. However, there are cases where separate arrangements are made for parts supply. For machinery and equipment that require significant effort for installation and reassembly, it is necessary to confirm the inspection conditions and foreign contractor tax with the exporter in advance.
齊藤公(Saito Hiroshi)
Business Advisor
G.A. Consultants Vietnam Co., Ltd
After graduating from university, he joined a PHP research institute and served as the head of the New York office. He then worked on the “Nagoya Port Redevelopment Project” at a subsidiary of the Chubu Nippon Broadcasting (CBC) company. He later shifted his base to Asia, where he was involved in the launch of “FM96.3” in Singapore, and the creation of “Hello Vietnam” and “Invest Asia” magazines in Vietnam. He then joined BW Industrial Development JSC, Vietnam’s largest rental factory development company, where he was responsible for attracting Japanese manufacturing companies. Currently, he is active as a consultant for the entry of Japanese companies at “G.A. Consultants”, one of the longest-standing Japanese HR consulting firms in Vietnam.
