Vietnam Bans Import of Used Machinery from June 15
Vietnam will ban the use of imported used machinery, equipment, and production line technology that is more than 10 years old, from June 15, 2019. The government passed the regulation in Decree No 18/2019/QD/TTg, which will replace circular No 23/2015/TT.
The ban on used machinery aims to limit the use of outdated, poor quality, and unsafe equipment in the country. In addition, only used machinery that directly serves production in Vietnam can be imported into the country.
Key highlights of the new regulation
Manufacturers wanting to import machinery and equipment for production in Vietnam should be aware of the following regulations which will take effect in June.
- The imported machinery must be manufactured in accordance with Vietnam’s National Technical Regulation (QCVN) or Vietnam’s Standard (TCVN) or Standards of G7 countries regarding safety, energy saving and environmental protection;
- Imported machinery should have at least 85 percent of original capacity and energy consumption should not be up by more than 15 percent of original design;
- The technology used must be in use in at least three production facilities in a member state of the Organization for Economic Cooperation and Development (OECD); and
- Machinery that is obsolete, of poor quality, and environmentally damaging cannot be imported.
Businesses that want to import used machinery must prepare dossiers that include:
- Copy of business registration certificate;
- Inspection certificate; and
- Originate certificate of manufacturer with year the equipment was made.
Businesses should be aware that customs authorities only process customs clearances for the imported machinery when all import dossiers are complete, valid, and meet necessary requirements.
The government has also directed the Ministry of Science and Technology to publish a list of old machinery and equipment whose import is banned.
Vietnam an expanding manufacturing hub
As Vietnam expands as a manufacturing hub, it relies on imported machinery mainly from China. However, analysts have warned that the country may become a landfill for outdated machinery, and have urged the government to tighten regulation on used machinery.
- Due Diligence from Dezan Shira & Associates
In 2018, Vietnam spent over US$32 billion on imports of machinery with nearly 40 percent coming from China as per the General Department of Customs. On average, Vietnam spends approximately US$ 1 billion per month on machinery and equipment from China.
The new regulation will help limit the dumping of cheap and poor quality of machinery in Vietnam as it moves towards Industry 4.0 requirements. The country has set a target for hi-tech products to account for at least 45 percent of the value of the manufacturing and processing industry by 2030.