Recently, the Minister of Industry and Trade has issued two consecutive Circulars related to the import and business of tobacco, including Circular 39/2023/TT-BCT regulating the import duty quota for raw tobacco materials in 2024 ("Circular 39") and Circular 43/2023/TT-BCT amending Circular 57/2018/TT-BCT ("Circular 57") regarding regulations on tobacco business ("Circular 43"). Below, ATA Legal Services has updated noteworthy contents as follows:
1. Restriction and reduction of licensing cases for tobacco business activities at the Ministry of Industry and Trade:
- Limitation of cases requiring a license from the Ministry of Industry and Trade within the scope of three contents, including (i) investment policy for tobacco product manufacturing; (ii) License for processing raw tobacco materials; and (iii) License for manufacturing tobacco products.
Previously, besides the above 3 contents, Circular 57 stipulated in an "open" direction: The Industrial Department would have the authority to receive, evaluate applications, and submit licenses for activities related to the tobacco business as per regulations.
- Removal of the approval procedure for the import policy of tobacco and tobacco materials at the Ministry of Industry and Trade:
Circular 57 stipulated that the Industrial Department - Ministry of Industry and Trade would be the focal point for receiving, inspecting, supervising, evaluating, and approving the import policy of tobacco for non-commercial purposes; importing raw tobacco materials, cigarette paper for the export of tobacco products or processing for export of tobacco products.
Circular 43 removes this procedure. Accordingly, the Industrial Department will only organize the receipt, inspection, supervision, evaluation, and submission to the Ministry's leadership for opinions before responding to enterprises for administrative procedures: Importing tobacco for non-commercial purposes; investing in innovating equipment, technology, investing in manufacturing and exporting tobacco, processing tobacco for export, relocating according to planning; investing in processing raw tobacco materials; importing raw tobacco materials for processing and exporting processed raw tobacco materials; importing machinery, equipment specialized in the tobacco industry; Notice of import quotas for raw tobacco materials, cigarette paper."
2. The import duty quota for raw tobacco materials in 2024 is 71,835 tons
According to Circular 39, the import duty quota for raw tobacco materials (HS code 2401) in 2024 (applicable until December 31, 2024) is 71,835 tons, an increase of about 3,000 tons compared to the quota in 2023 (68,414 tons).
The import duty quota for raw tobacco materials is assigned to traders with licenses to manufacture cigarettes issued by the Ministry of Industry and Trade and has a demand for importing raw tobacco materials for cigarette production.
3. Clear regulations on the submission method and agency receiving reports on tobacco business activities of enterprises
Circular 43 stipulates that enterprises will submit reports to the reporting agency by one of the following methods:
a. Direct submission;
b. Submission via postal services;
c. Other methods as prescribed by law.
In addition, for reports on the production of tobacco products and the import of tobacco products, instead of submitting to both the Ministry of Industry and Trade and the Ministry of Finance, Circular 43 only requires enterprises to submit to a single agency, which is the Ministry of Industry and Trade.
Circular 39 and Circular 43 take effect from February 12, 2024.
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