VietNamNet Bridge - The Ministry of Science and Technology’s (MST) Circular 23 on the required quality of used machine imports, which aims to encourage businesses to renovate technologies, turns out to be a barrier to production.

 

Circular 23 on the required quality of used machine imports turns out to be a barrier to production.

Vo Quang Hue, CEO of Bosch Vietnam, while affirming that it is necessary to set barriers to prevent outdated technologies from entering Vietnam, noted that Circular 23 sets ‘rigid regulations’ which places difficulties on enterprises.

Bosch now has a car part research & development center which specializes in experimenting with new products for the global Bosch Group. A product, before marketed, must be experienced in many countries, and it must not be considered ‘a used’ product.

If buying used equipment, investors can save up to 50 percent of money.

“A car, for example, needs to be tested in the environment with the temperature of minus 45oC in the North Pole or above 50oC in Sahara desert. Therefore, the same car will be imported to many countries for experiments. And it must not be listed as ‘used import’,” Hue said.

Sherry Boger, chair of Amcham in Vietnam, said the regulations in Circular 23 would hinder businesses to make investment, import machines and equipment, and delay technology transfer in the fields of semiconductors, automobiles and motorbikes. 

Citing a US business, she said if buying used equipment, investors can save up to 50 percent of money. 

As businesses have to pay a lot for brand new equipment and have to wait long for deliveries, they prefer using used equipment. The machines and equipment can be transferred from their production bases in China, Mexico, Costa Rica and Malaysia to Vietnam.

According to Fred Burke, head of the Vietnam Business Forum’s Working Team on Investment & Trade, Circular 23 has drawn much attention from manufacturers, especially high-technology ones which plan to move to Vietnam with used equipment.

Businesses, in installing production lines for assembling and testing computer chips, need to import the kind of component specifically designed for that work. The component has been used most recently in Malaysia. However, if referring to Circular 23, it is prohibited from entering Vietnam.

Circular 23 stipulates that the used equipment to be imported to Vietnam must not be used for more than 10 years, but this is exempted in the cases where used equipment are listed in the approved foreign direct investment (FDI) profiles. This allows foreign investors to relocate their production lines from other countries to Vietnam.

However, foreign investors still think the circular has set up too many unnecessary barriers.

The CEO of a foreign invested enterprise (FIE) in Vietnam noted the biggest concern of businesses is that Circular 23 is applied in a mechanical way. He said that Vietnam needs state officials with high assessment capability and flexibility. 


NLD