Decree No. 82/2019/ND-CP dated November 12, 2019 prescribing the import and breaking of used ships

DECREE

PRESCRIBING IMPORT AND BREAKING OF USED SHIPS

Pursuant to the Law on Government Organization dated June 19, 2015;

Pursuant to the Maritime Code of Vietnam dated November 25, 2015;

Pursuant to the Law on environmental protection dated June 23, 2014;

Pursuant to the Law on investment dated November 26, 2014 and the Law on amendments to Article 6 and Appendix 4 on the List of conditional business lines stipulated in the Law on investment;

Pursuant to the Law on enterprises dated November 26, 2014;

At the request of the Minister of Transport;

The Government promulgates a Decree prescribing the import and breaking of used ships.

Chapter I

GENERAL PROVISIONS

Article 1. Scope

1. This Decree deals with types of ships to be imported, requirements to be satisfied to import used ships for breaking and management of the breaking of used ships in Vietnam.  

2. Regulations on import and breaking of ships herein shall also apply to the import and breaking of floating storage units and mobile offshore drilling units.

Article 2. Regulated entities   

This Decree applies to both domestic and foreign organizations and individuals engaging in the import and breaking of used ships.

Article 3. Definitions

For the purposes of this Decree, these terms are construed as follows:

1. “ship-breaking” refers to the process of dismantling or demolishing the entire structure of a ship at a ship-breaking facility.

2. “ship-breaking facility” refers to the place dedicated to the breaking up of ships.

3. “ship-breaking plan” refers to the plan developed by the owner of the ship-breaking facility for breaking up of each ship.

Article 4. Rules for import and breaking of used ships

1. The import and breaking of used ships must comply with regulations on maritime safety, maritime security, occupational safety, prevention and control of fire and explosion; do not pose any unnecessary risks to human health and the environment.

2. Used ships shall be only demolished at ship-breaking facilities that have been put into operation in accordance with law regulations.

3. The used ship which is imported for breaking must be sent to the ship-breaking facility within 30 days from the date of completion of customs procedures and 90 days from the date on which the ship arrived at the first port of Vietnam. Ship-breaking operations must be completed within a maximum period of 180 days from the date of commencement of ship-breaking.   

4. Enterprises that import of used ships and/or carry out ship-breaking operations shall purchase and fulfill obligations under environmental damage insurance policies for the import and breaking of used ships in accordance with law regulations.

Article 5. Types of ships to be imported for breaking

The following used nonmetallic hull ships are allowed to be imported for breaking:

1. Ships carrying dry cargo, including general cargo, bulk cargo, equipment, wood chips, timber, grains, packaged merchandise, and iron and steel products.

2. Container ships.

3. Ore carriers.

4. Ships carrying liquid cargo, including crude oil, oil products and vegetable oil.

5. Ships carrying gases or liquefied gases.

6. Ro-Ro ships, passenger ships, sea barges and ferries.

Article 6. Breaking of Vietnamese ships and foreign ships sunken in territorial waters of Vietnam

1. The breaking of Vietnamese-flagged ships and foreign-flagged ships sunken in the territorial waters of Vietnam shall comply with the Government’s Decree No. 05/2017/ND-CP dated January 16, 2017, and other relevant law regulations.

2. In case the breaking of a foreign-flagged ship sunken in Vietnam is carried out in Vietnam, import procedures must be followed in accordance with law regulations.

Chapter II

MANAGEMENT OF SHIP-BREAKING FACILITIES

Article 7. Requirements to be satisfied to put a ship-breaking facility into operation

A ship-breaking facility is required to meet the following requirements:

1. It must have wharfs and navigational channels published in accordance with the Government’s Decree No. 58/2017/ND-CP dated May 10, 2017.

2. It must meet environmental protection requirements for ship-breaking facilities set forth in the Government’s Decree No. 40/2019/ND-CP dated May 13, 2019.

3. It must have personnel and procedures for control of hazards and harmful factors, and the plan for handling serious technical incidents threatening occupational safety and health in accordance with the Government’s Decree No. 39/2016/ND-CP dated May 15, 2016.

4. It must meet fire prevention and control requirements and have a firefighting plan in accordance with the Government’s Decree No. 79/2014/ND-CP dated July 31, 2014.

Article 8. Authority to decide putting of a ship-breaking yard into operation

The Minister of Transport shall make decisions to put the ship-breaking facilities into operation at the request of the Director of Vietnam Maritime Administration.

Article 9. Procedures for making decision to put a ship-breaking yard into operation

1. The owner of the ship-breaking facility shall submit an application for an approval to put the ship-breaking facility into operation directly, by post, via the web portal or in other appropriate form to Vietnam Maritime Administration.

2. An application for approval to put the ship-breaking facility into operation includes:

a) The application form for approval to put the ship-breaking facility into operation, which is made according to Form No. 01 in Appendix enclosed herewith (01 copy);

b) The Decision on approval for the environmental impact assessment report which is enclosed with the environmental impact assessment report made by the owner of the ship-breaking facility (01 certified true copy or 01 copy enclosed with its original for verification purpose);

c) The environmental management system manual which must meet TCVN ISO 14001 (01 certified true copy or 01 copy enclosed with its original for verification purpose);

d) The as-built dossier of facilities and technical infrastructure serving environmental protection purposes (originals or certified true copies);

dd) The procedure for control of hazards and harmful factors and the plan for handling serious technical incidents threatening occupational safety and health (originals or certified true copies);

e) The written approval for the fire prevention and fighting plan given by the fire police department (01 certified true copy or 01 copy enclosed with its original for verification purpose).

3. Process for receiving and processing applications:

a) Vietnam Maritime Administration shall receive application and provide instructions for applicant to modify the application if it is invalid in accordance with regulations herein. 

b) Within 03 business days from the receipt of sufficient and valid application, Vietnam Maritime Administration shall appraise the received application and submit the report on application appraisal to the Ministry of Transport.  During the appraisal, Vietnam Maritime Administration shall carry out surveys, verification of the received information and data on facilities of the ship-breaking facility;

c) Within 02 business days from the receipt of the request from the Vietnam Maritime Administration, Ministry of Transport shall promulgate a decision to put the ship-breaking facility into operation according to Form No. 02 in Appendix enclosed herewith. if an application is refused, a written notification in which reasons for refusal must be indicated shall be issued to the applicant.

Article 10. Procedures for re-issuing decision to put a ship-breaking yard into operation

1. A decision to put a ship-breaking facility into operation shall be re-issued upon changes in the issued decision.

2. The owner of the ship-breaking facility shall submit an original of the application for re-issuance of the decision to put the ship-breaking facility into operation, which is made according to Form No. 03 in Appendix enclosed herewith, and documents concerning such changes ((01 certified true copies or copies presented with their originals for verification) to Vietnam Maritime Administration.

3. Process for receiving and processing applications shall comply with Clause 3 Article 9 hereof.

Article 11. Decision to immediate suspend operations of a ship-breaking facility

1. At the request of a competent authority, Ministry of Transport shall make decision to immediately suspend operations of the ship-breaking facility where an accident or incident occurs and causes serious damage to people and environment.

2. Based on recommendations specified in the written request of a competent authority, within a business day from the receipt of such request, the Ministry of Transport shall consider making a decision to immediately suspend operations of the ship-breaking facility.

3. Ministry of Transport shall inform relevant authorities and publish the decision to immediately suspend operations of the ship-breaking facility on its website.

Article 12. Decision to shut down a ship-breaking facility

1. At the request of a competent authority, Ministry of Transport shall decide to shut down the ship-breaking facility in the following circumstances:

a) The ship-breaking facility fails to meet requirements laid down in Article 7 hereof;

b) The ship-breaking facility must be shut down because of national defense and security reasons;

c) It must be shut down in case of epidemics, disasters and other cases as prescribed by laws.

2. Based on recommendations specified in the written request of a competent authority, within 05 business days from the receipt of such request, the Ministry of Transport shall consider making a decision to shut down the ship-breaking facility. If Ministry of Transport decides not to shut down the ship-breaking facility, it shall provide written reasons thereof.

3. Ministry of Transport shall inform relevant authorities and publish the decision to shut down the ship-breaking facility on its website.

Article 13. Ship-breaking plan

1. Before carrying out ship-breaking operations, the owner of the ship-breaking facility shall prepare and apply for approval for its ship-breaking plan in accordance with Clause 2 of this Article.

2. The ship-breaking plan shall, inter alia, include the following contents:

a) General information: Name and address of the importer; name and address of the ship-breaking facility; details of the ship to be demolished (name, flag state and specifications of the ship);

b) Information relating to the ship-breaking:  Ship-breaking technological process (the order of the ship’s items to be dismantled, enclosed with its general arrangement drawing, the drawing of the ship-breaking site which is included in the general layout of the ship-breaking facility); equipment and personnel performing ship-breaking activities; date of commencement and date of completion of the ship-breaking;

c) Information relating to occupational safety measures, environmental sanitation measures, measures against fire, explosion and environmental pollution.  

Article 14. Authority and procedures for approving ship-breaking plan

1. The maritime administration of the region where the ship-breaking facility is located shall have the authority to give approval for the ship-breaking plan upon the request of the ship-breaking facility.

2. The owner of the ship-breaking facility shall submit an application for approval for the ship-breaking plan to the relevant regional maritime administration.

An application for approval for the ship-breaking plan for each ship shall include:

a) The application form for approval for the ship-breaking plan, which is made according to Form No. 04 in Appendix enclosed herewith (01 original);

b) The ship-breaking plan (01 original).

3. Application processing:

a) Within 02 business days from the receipt of the valid application, the regional maritime administration shall get opinions from relevant authorities about the ship-breaking plan.

Within 05 business days from the receipt of the written request for opinions from the regional maritime administration, requested authorities shall provide their opinions in writing.  

b) Within 03 business days from the receipt of opinions from relevant authorities, the regional maritime administration shall make decision on approval for the ship-breaking plan according to the Form No. 05 in Appendix enclosed herewith and send it to the applicant. If an application is refused, the regional maritime administration shall provide written reasons of such refusal to the applicant.

Article 15. Implementing the ship-breaking plan

1. The owner of the ship-breaking facility shall perform breaking of the ship according to the approved ship-breaking plan.

2. The regional maritime administration shall take charge and cooperate with relevant authorities to supervise and inspect the implementation of the ship-breaking plan for each specific ship in accordance with law regulations.

Chapter III

IMPORT OF USED SHIPS FOR BREAKING

Article 16. Requirements to be satisfied to import used ships for breaking

1. An importer of the used ship for breaking is required to meet the following requirements:

a) It must be a Vietnamese enterprise 100% of charter capital of which is held by Vietnamese organization(s) or individual(s);

b) It must own or manage the ship-breaking facility which has been put into operation in accordance with law regulations.

2. The used ship to be imported for breaking must meet the following requirements:

a) It is a type of ships prescribed in Article 5 hereof;

b) The ship is not under any mortgage or maritime claim according to the written certification of the shipowner who shall also assume responsibility for such certification;

c) The imported ship shall not be modified, upgraded, repurposed, transferred or sold to another party.

Article 17. Procedures for purchasing used ships for breaking

1. The purchase of a used ship for breaking with state funding shall be made as follows:

a) Select the ship, and estimate the purchase price and other costs of ship purchase;

b) Formulate, appraise and approve of the plan for purchase of used ship for breaking.

The ship purchase plan shall include contents about the necessity of the investment, type of ship, quantity, basic specifications, estimated purchase price, funding source, method of purchase, and economic and environmental efficiency;

c) Make decision on purchase of used ship for breaking.

2. The purchase of used ships for breaking with other funding sources shall be subject to decisions of the relevant enterprises, organizations or individuals.

Article 18. Authority to make decision on purchase of used ships for breaking

The authority to make decision on purchase of used ships for breaking shall comply with regulations of the Law on investment.

Article 19. Procedures for issuance of license to import used ships for breaking

1. An application for import license shall include:

a) The application form for the license to import used ships for breaking, which is made according to Form No. 06 in Appendix enclosed herewith (01 original);

b) The decision to put the ship-breaking facility into operation (01 certified true copy or 01 copy presented with its original for verification purpose);

c) The enterprise’s decision on purchase of the used ship for breaking (01 certified true copy or 01 copy presented with its original for verification purpose).

2. Application processing:

a)  Vietnam Maritime Administration shall receive and examine the application, and request the applicant to modify the application if it is insufficient as regulated;

b) Within 03 business days from the receipt of the sufficient application, Vietnam Maritime Administration shall appraise the received application and submit the report on application appraisal to the Ministry of Transport for decision;

c) Within 02 business days from the receipt of the written report from Vietnam Maritime Administration, Ministry of Transport shall issue the license to import used ship for breaking according to Form No. 07 in Appendix enclosed herewith; If an application is refused, Ministry of Transport shall provide written reasons for such refusal to the applicant.

Article 20. Procedures for import of used ships for breaking

1. When following procedures for import of the used ship for breaking, the importer shall submit the following documents to the relevant customs authority:

a) The License to import used ships for breaking (01 certified true copy or 01 copy presented with its original for verification purpose);

b) The enterprise’s decision on purchase of the used ship for breaking (01 certified true copy or 01 copy presented with its original for verification purpose);

c) The contract for sale and purchase of the used ship for breaking (01 certified true copy or 01 copy presented with its original for verification purpose);

d) The record of transfer of the used ship which bears the signatures of the transferring and receiving persons (01 certified true copy or 01 copy presented with its original for verification purpose).

2. Based on the import supporting documents prescribed in Clause 1 of this Article and pursuant to regulations of the Law on customs and relevant laws, the customs authority shall carry out procedures for import of the used ship for breaking.

Chapter IV

IMPLEMENTATION

Article 21. Responsibility for implementation

1. Minister of Transport shall organize the performance of state management tasks of import and breaking of used ships; take charge and cooperate with relevant ministries and provincial People's Committees in implementing this Decree.

2. Ministry of Natural Resources and Environment shall organize the performance of state management tasks of environmental protection associated with the breaking of used ships in accordance with law regulations; take charge and cooperate with relevant ministries to provide guidance on environmental damage insurance; review and revise legislative documents on environmental protection associated with the breaking of used ships and other watercrafts in Vietnam.

3. Ministry of Finance shall take charge and cooperate with relevant ministries to provide guidance on taxes, fees and charges relating to the import of used ships for breaking and customs procedures for used ships imported for breaking.

4. Ministries and provincial People’s Committees shall, within the ambit of their assigned functions, duties and powers, perform state management of import and breaking of used ships.

5. Owners of ship-breaking facilities shall strictly comply with regulations herein; comply with regulations of the Law on environmental protection and relevant laws regarding business operations and service provisions when engaging in breaking of other watercrafts.

Article 22. Effect

1. This Decree comes into force from December 30, 2019 and supersedes the Government’s Decree No. 114/2014/ND-CP dated November 26, 2014.

2. Article 4 of the Government’s Decree No. 147/2018/ND-CP dated October 24, 2018 shall be abrogated.

3. If any legislative documents referred to in this Decree are amended, supplemented or superseded, the new ones shall apply.

Article 23. Implementation organization

Ministers, heads of ministerial agencies, heads of Governmental agencies, Chairpersons of provincial People’s Committees, and relevant organizations and individuals shall implement this Decree./.