I. Definition on chemical trade:
Pursuant to Clause 2, Article 3 of Decree No. 113/2017/ND-CP:
“2. “chemical trade” includes sale, export and import of chemicals to provide chemicals on the market for profitable purposes.”
Accordingly, when enterprises import chemicals in order to provide chemicals on the market for profitable purposes,
Thus, when an enterprise imports chemicals for the purpose of supplying them to the market for profitable purposes, such activity is considered chemical trade under the applicable laws.
Accordingly, what licenses or certificates are required for an enterprise to conduct this business activity?
Pursuant to current regulations, depending on the type of chemical or mixture containing chemicals listed in the categories of conditional or restricted chemical trading in the industrial sector, the enterprise must obtain the corresponding licenses or certificates, including but not limited to the following:
- Certificate of eligibility for the trading of industrial chemicals subject to conditional production and trading (“Certificate”);
- License for trading of industrial chemicals restricted from production and trading (“License”).
So, in which specific cases would enterprises be required to obtain the corresponding certificate or license?
II. Certificate of eligibility for the trading of industrial chemicals subject to conditional production and trading
II.1. Cases in which the enterprises are required to obtain the Certificate of eligibility for the trading of industrial chemicals subject to conditional production and trading
Pursuant to Article 8 of Decree 113/2017/ND-CP, cases in which which the enterprises is required to obtain the Certificate are as follows:
“Article 8. Conditional industrial chemicals
Conditional industrial chemicals include:
- Chemicals on the list of conditional industrial chemicals stated in Appendix I attached hereto.
- Mixtures of chemicals specified in Appendix I and Appendix II not subject to restricted industrial chemicals mentioned in Article 14 herein that are classified according to Article 23 herein subject to at least one of the following groups:
a) Category 1/Category 2/Category 3 or type A/B/C/D hazardous material;
b) Category 2 and Category 3 acute toxicity (through variable exposures);
c) Category 1/Category 2/Category 2A serious eye damage/eye irritation;
d) Category 1 and Category 2 skin corrosion/irritation;
dd) Category 2 carcinogenicity, germ cell mutagenicity or reproductive toxicity;
e) Category 1 environmental hazard.”
Accordingly, if the chemicals fall under the list prescribed in Appendix I of Decree 113/2017/ND-CP, the enterprises shall register for obtaining the Certificate.
In case the goods are determined as mixture of chemicals and there is chemicals in the mixture fall under this list, the enterprises needs to register for obtaining the Certificate.
contains chemicals listed in Appendix I (chemicals subject to conditional trading) and chemicals listed in Appendix II (chemicals restricted from trading), the enterprise must specifically determine whether the chemical listed in Appendix II possesses the characteristics as prescribed above. If so, the enterprise must apply for the Certificate.
If the chemical does not satisfy such characteristics and also falls under the conditions set forth in Clause 2, Article 14 of Decree No. 113/2017/ND-CP, the enterprise is required to obtain the License.
II.2. Cases in which enterprises are not subject to obtaining the Certificate of eligibility for the trading of industrial chemicals subject to conditional production and trading
Pursuant to Article 10a, Decree 113/2017/ND-CP amended and supplemented by Decree 82/2022/ND-CP, there are certain cases in which enterprises are not subject to obtaining the Certificate:
“Article 10a. Cases that are not subject to issuance of the certificate
1. The dilution and mixture of chemicals without chemical reactions that form conditional industrial chemicals for internal use or production of other products and goods of the applicant.
2. The concentration of a chemical on the List of conditional industrial chemicals in a mixture is less than 0.1%.”
Accordingly, whether an enterprise is required to obtain the Certificate depends not only on the nature and characteristics of the chemical or chemical mixture, but also on the purpose of use and the concentration of the chemical contained in the mixture.
In case the enterprise imports chemicals for internal use or for the production of other products and goods of the enterprise itself, and such activity only involves the dilution or mixture of chemicals without chemical reactions that result in the formation of conditional industrial chemicals, then the enterprise is not required to obtain the Certificate.
In addition, where the concentration of a chemical on the List of conditional industrial chemicals (Appendix I) in a mixture is less than 0.1%, the enterprise is also not subject to the requirement for obtaining the Certificate.
III. License for trading of industrial chemicals restricted from production and trading
III.1. Cases in which the enterprises are required to obtain the License for trading of industrial chemicals restricted from production and trading
Pursuant to Article 14 of Decree 113/2017/ND-CP, enterprises shall obtain the License in case the chemicals or mixture of chemicals contains of chemicals fall under the following cases:
“Article 14. Restricted industrial chemicals
Restricted industrial chemicals include:
- Chemicals on the list of restricted industrial chemicals stated in Appendix II attached hereto.
- Mixtures of chemicals specified in Appendix II attached hereto classified according to Article 23 herein and subject to at least one of the following groups:
a) Category 1 acute toxicity (through variable exposures);
b) Category 1A and Category 1B carcinogenicity;
c) Category 1A and Category 1B reproductive toxicity;
d) Category 1A and Category 1B germ cell mutagenicity.”
Similarly to the analysis regarding the requirement for obtaining the Certificate, the enterprise must review the chemicals listed in Appendix II, as amended and supplemented by Decree No. 82/2022/ND-CP, to determine whether the chemical or chemical mixture is subject to the requirement for obtaining the License, or whether it falls under the scope of the Certificate requirement.
III.2. Cases in which the enterprises are not subject to obtaining the License for trading of industrial chemicals restricted from production and trading
As stipulated in Article 16a of Decree 113/2017/ND-CP, as amended and supplemented by Decree No. 82/2022/ND-CP, in certain cases, the enterprises are not subject to the requirements for License:
“Article 16a. Cases that are not subject to issuance of the license to produce and trade restricted industrial chemicals
- The dilution and mixture of chemicals without chemical reactions that form restricted industrial chemicals for internal use or production of other products and goods of the applicant.
- The concentration of a chemical on the List of restricted industrial chemicals in a mixture is less than 0,1%.”
Similar to the cases where a Certificate is not required, the requirement to obtain a License for the importation of chemicals or chemical mixtures for trading purposes also depends on the intended purpose and the concentration of the chemicals presenting in the mixture.
IV. Notable points for enterprises engaing in chemical importation activities with the purpose of trading:
– Upon importation, the enterprises must comply with customs procedures and declarations of imported chemical requirements in accordance with Article 27 of Decree No. 113/2017/ND-CP;
– If the chemical is not listed in Appendix I or II, the enterprises should further review whether the chemical or chemical mixture falls under Appendix III or Appendix IV. If it is listed in Appendix III, the enterprise is prohibited from trading such chemicals, as they are banned from business operations. If it is listed in Appendix IV, the enterprise must develop plans for prevention of and response to chemical emergencies, provided that the maximum quantity of chemical present at any one time meets or exceeds the prescribed threshold (measured in kilograms);
– The enterprise must comply with the annual reporting regulations in accordance with Decree No. 113/2017/ND-CP;
– For convenient chemical look-up, declaration, and reporting, the enterprises may access the Vietnam National Chemical Database System at: Hệ thống CSDL hóa chất quốc gia;
– Failure to obtain the required Certificate or License, or failure to comply with legal requirements on declarations and reporting, may result in administrative sanctions in accordance with Decree No. 71/2019/ND-CP.
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