If the
circular with the drafted regulations is issued, it will put an end to the
prolonged dispute between domestic farm produce processors and foreign invested
enterprises, for the activities of collecting farm produce for export.

The draft
circular said that foreign invested enterprises, which have the licenses to
export products can: 1) export the products allowed, 2) purchase goods from the
businessmen, who have business registration certificates for trading or
distributing these kinds of products for export, 3) follow customs procedures
directly at the customs agencies.

The foreign
invested enterprises which have the licenses to export products are not allowed
to set up units in charge of collecting products for export.

As such,
the draft circular paves the way for the legalization of the foreign
businessmen’s right to collect farm produce in Vietnam

The dispute
relating to the right to collect farm produce in Vietnam has been raised for many
months, after Vietnamese export companies found out  that foreign businessmen were trying to
scramble for farm produce by paying higher prices.

The dispute
has become more serious recently, when in 2010-2011, according to the Vietnam
Coffee and Cocoa Association (Vicofa), less than 10 foreign invested
enterprises collected up to 40 percent of the total coffee output, while 140
domestic exporters could collect the other 60 percent.

A lot of
complaints have been lodged to state management agencies by coffee exporters
and Vicofa, which said that “it is illegal for foreign businessmen to collect
coffee materials directly from farmers.”

Chair of
Vicofa, Luong Van Tu, has affirmed that the enterprises have been collecting
farm produce without cooperating with domestic enterprises, and this must be
seen as a violation of the World Trade Organization’s (WTO) rules.

Meanwhile,
foreign invested enterprises have been keeping quiet, believing that they are
still obeying Vietnamese laws.

A manager
of a foreign invested enterprise has denied the coffee collection directly from
farmers.

“No foreign
invested enterprise can set up the networks to collect farm produce directly
from farmers. They have been mainly purchasing from the enterprises with legal
entities, or the households which have business registration certificates and
can issue bills to collectors,” he said. “Only legal entities and households
can issue red invoices – the things we must show to state officials when
exporting products,” he explained. “Moreover, trading activities of foreign
invested enterprises are always put under strict control”.

“Most of
the coffee we purchased came from the contracts we signed with domestic trading
units. We only purchased in small quantities from some households which have
big coffee growing areas near our factory,” he added.

Vicofa has
affirmed that under the current laws, foreign invested enterprises have the
right to export coffee, but they do not have the right to develop the networks
to collect goods in Vietnam
for exporting.

Meanwhile,
an official from the Ministry of Industry and Trade, said that under Vietnam’s WTO commitments, foreign invested
enterprises do not have the right to set up units to collect farm produce in Vietnam, but
they have the right to sign the contracts on purchasing products with domestic
legal entities.

An expert
said that in fact, the coffee industry has witnessed the involvement of foreign
enterprises for the last ten years. Domestic and foreign businessmen have been
competing with each other fairly, and there has been no unhealthy competition.

Source: Thoi bao Kinh te Saigon