Regulations on classification of wood processing and exporting enterprises

On December 29, 2021, the Ministry of Agriculture and Rural Development (MARD) issued Circular 21/2021/BNNPTNT regulating the classification of wood processing and exporting enterprises (hereinafter referred to as Circular 21 for short). This Circular applies to enterprises that have processing activities concurrently with timber export activities. Updated to June 2022, the agency that received the registration of business classification has classified enterprises in localities and has 155 enterprises classified as Group I including enterprises in Tuyen Quang, Dong Nai provinces. Nai, Bac Kan, Hanoi, Binh Duong, Thanh Hoa, Kon Tum, Binh Dinh, Ha Giang, Da Nang, Quang Tri, Quang Nam and Long An.

What documents are included in the business classification registration?

Following documents are needed to submit for classification:

• Application for request for classification(Using sample 01, Appendix I issued together with Circular 21)
• The declaration and classification of wood processing and exporting enterprises according to sample 08, Appendix I issued together with Decree No. 102/2020/ND-CP
• Documents/ evidences to prove compliance with the requirements for classification criteria as prescribed in Appendix II issued together with Circular 21.

Which agency will take responsible for business classification registration?

The authorities who receive for registration and classification of enterprises as follows:

Department of Agriculture and Rural Development (DARD) will be responsible for registration and classification where does not have a provincial Forest Protection Department or where the enterprise has its head office or where its wood processing facility is located.

Authorities who will responsible for both receiving application for registration and classification and report classifiration results to Forest Protection Department (FPD). FPD announces the list of enterprises listed in Category I.

How business classification has done?

The first classification is performed when an enterprise registers in the Enterprise Classification Information System; the second classification is carried out one year after the first classification; the third and subsequent classification for Category I is every 2 years, Category II are once a year, from the date of the previous assessment or from the date of classification from category I to category II.

What are the business classification criteria?

Category I are including enterprises those that fully meet the following criteria:

Fully comply with the provisions of law in the establishment and operation of at least 01 year from the date of registration of the establishment of the enterprise;

Comply with legal regulations on ensuring legal timber according to the provisions of this Decree and the regulations of the Minister of Agriculture and Rural Development on management and traceability of forest products;

Comply with the reporting regime as prescribed in Clause 4, Article 27 of Decree 102/2020/ND-CP and keep original records as prescribed by law;

Not violating the law to the extent that they must be handled according to the provisions of Clause 4, Article 13 of Decree Decree 102/2020/ND-CP.

The specific criteria are shown in the following table:

I COMPLIANCE WITH LAW ON THE ESTABLISHMENT AND OPERATION OF ENTERPRISE

1 To comply with the law on business establishment, the following documents are required:

a Certificate of business registration (for non-foreign-invested enterprises)

b Certificate of investment registration for enterprises with foreign investment capital or with foreign elements accounting for 51% of charter capital or enterprises operating in industrial parks or export processing zones

2 Complying with the provisions of the law on environment must have one of the following documents:

a Decision approving the report on environmental impact assessment for wood processing establishments, wood chips from natural forest wood with a capacity of 5,000 m3 of products/year or more

b Decision approving the report on environmental impact assessment for plywood production establishments with a capacity of 100,000 m2 of products/year or more

c Decision approving the report on environmental impact assessment for furniture manufacturing establishments with a total area of warehouses and workshops of 10,000 m2 or more

d Have an environmental protection plan for production facilities whose capacity or area is smaller than the capacity or area of the production facilities specified at points a, b and c above.

3 To comply with the provisions of the law on fire prevention and fighting, the following documents are required:

– Fire prevention and fighting plan in accordance with the law

4 In compliance with the law on monitoring the import and export of forest products, the following documents are required:

– The logbook of import and export of forest products is fully recorded in accordance with the law

To comply with the provisions of the tax law, labor must ensure the following criteria:

1. a) Not being on the list of public information about business organizations and individuals showing signs of tax law violations

b Have a plan on occupational hygiene and safety in accordance with the law

c The employee’s name is on the payroll of the enterprise

d Publicly post information on payment of social and health insurance premiums for employees in accordance with the Law on Social Insurance

d The employee is a member of the trade union of the enterprise

II COMPLIANCE WITH LAW ON LEGAL WOOD ORIGIN

1 Comply with the provisions of the law on logging records for timber processing and exporting enterprises that directly exploit timber for processing materials.

1. a) Comply with regulations on order and procedures for logging

b List of timber as prescribed by law

c Copy of record of origin of harvested timber

2 Comply with the law on timber records after confiscation treatment for wood processing and exporting enterprises that use confiscated wood as raw materials for processing

a List of timber according to the provisions of law

b Copy of wood records after confiscation treatment

3 Comply with the provisions of the law on imported wood records for wood processing and exporting enterprises using imported wood as raw materials for processing

a List of timber according to the provisions of law

b Copy of imported wood profile

4 Comply with the provisions of law on documents in the process of buying, selling and transporting; Processing

a List of timber according to the provisions of law

b Copy of wood origin record

5 Comply with the provisions of the law on wood records for processing and exporting enterprises using raw wood grown by enterprises on their own land

a Comply with legal regulations on land use rights and forest use rights

b Copies of records of timber harvested in accordance with the law

Category II are including enterprises that have not yet met one of the criteria specified in Clause 1 of this Article.