RESTRICTED  WORLD TRADE  
ORGANIZATION  WT/ACC/VNM/14/Add.2
21 April 2006 
 (06-1849) 
Working Party on the 
Accession of Viet Nam Original:   English 
 
 
  
ACCESSION OF VIET NAM  
 
Notification on State Trading Enterprises
 
 
Addendum  
 
New and Additional Notification on VINATABA  
(Pursuant to Article XVII:4(a) of the GATT 1994 and Paragraph 1 
 of the Understanding on the Interpretation of Article XVII) 
 
 
 The following submission, dated 10 April 2006, is being circulated at the request of the Delegation of the Socialist Republic of Viet Nam.  
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 WT/ACC/VNM/14/Add.2 
Page 2  
 
  As part of Viet Nam’s commitments for WTO accession, the current prohibition on 
importation of cigarettes and cigars will be abolished as from Viet Nam’s accession to the WTO.  Following the change, importation of cigarettes and cigars will be allowed through the Viet Nam 
National Tobacco Corporation (VINATABA) who will act as the sole importer.  Following are the 
information regarding these arrangements in the format of a notification on State Trading: 
I. Enumeration of State Trading Enterprises 
A. Identification of State Trading Enterprise
 
 Viet Nam National Tobacco Corporation (VINATABA) 
 25A Ly Thuong Kiet Street, Hanoi, Viet Nam  Tel:  84 4 8265778 / 8251381 
 Fax: 84 4 8265777 
B. Description of products affected
 
 HS Commodity 
1.  2402.10.00 Cigars, cheroots and cigarillo s, containing tobacco 
2.  2402.20.10 Beedies 
3.  2402.20.90 Other 
4.  2402.90.10 Cigars, cheroots an d cigarillos of tobacco substitutes 
5.  2402.90.20 Cigarettes of tobacco substitutes 
6.  2403.10.11 Blended tobacco 
7.  2403.10.19 Other 
8.  2403.91.00 "Homogenised" or "reconstituted" tobacco 
9.  2403.99.10 Tobacco ex tracts and essences 
10.  2403.99.40 Snuff 
11.  2403.99.50 Smokeless tobacco, incl uding chewing and sucking tobacco 
12.  2403.99.60 Ang Hoon 
13.  2403.99.90 Other 
II. Reason and Purpose  
A. Reason or purpose for establishing and/or maintaining State Trading Enterprise  
 As cigarettes are harmful to  consumer health, Viet Nam does not encourage cigarettes 
consumption in order to protect public heath. Viet Nam has acceded to the Framework 
Convention on Tobacco Control (FCTC).  Now the Government of Viet Nam is drafting a 
plan to implement the FCTC with more stringent policies on cigarette control, including measures to control and limit toward reduction of cigarettes supplies.  
 In accordance with the national policies on ciga rette control, VINATABA will be appointed 
as the sole importer of cigarettes/cigars with a view to facilitating the efficient control on 
imported cigarettes/cigars and preven ting the rise in cigarette demand. 
 VINATABA is currently a state-owned enterprise licensed to conduct business in 
cigarettes/cigars.  
 VINATABA plays a key role in Viet Nam’s tob acco industry with the largest market share in 
Viet Nam. 
 VINATABA has a nationwide formal channel of ci garettes distribution.  Therefore, using this 
system for distributing imported cigarettes will fa cilitate the circulation of imported cigarettes 
in the Vietnamese market and the management of the State for the national health purposes.  WT/ACC/VNM/14/Add.2 
 Page 3 
 
 
 B.  Legal authority  
 - The Framework Convention on Tobacco Control (FCTC) of the World Health 
Organization, to which Viet Nam has acceded; 
 -  Directive No.13/1999/CT-TTg dated 12 May 1999 of the Prime Minister on 
re-arranging the production and trading of the tobacco industry; 
 - Resolution No.12/2000/ND-CP dated 14 August 2000 of the Prime Minister on 
"National Policy on Prevention against Ci garettes Effects in the 2000-2010 period"; 
and 
 - Decree No. 76/2001/ND-CP dated 22 October 2001 on the manufacture and trading 
of cigarettes. (Article 2 of Decree No. 76/2001/ND-CP stipulates that "the 
consumption of cigarettes is not encouraged. The State implements a uniform 
management over the tobacco industry and has the exclusive right to manufacture cigarettes.  VINATABA plays the major role in implementing this guideline".) 
 Viet Nam has committed to abolish cigarettes import prohibition upon accession to the WTO. 
Legal documents assigning VINATABA as the sole importer of cigarettes will be issued as 
soon as the import prohibition is abolished. 
III.  Description of the Functioning of the State Trading Enterprise 
A. Summary statement providing overview of operations of the State Trading Enterprise
 
 VINATABA is the major state-owned cigarettes enterprise with the larg est market share in 
the country. VINATABA has good reputation and experience in the tobacco industry.   
B. Specification of exclusive or special right s or privileges enjoyed by the State Trading 
Enterprise   
 VINATABA will be the sole importer of tobacco products in Viet Nam. C. Type of entities other than the State Trading Enterprise that are allowed to engage in 
importation/exportation and c onditions for participation  
 None. 
D. How import/export levels are determined by the State Trading Enterprise  
 Annual import volume of VINATABA is determin ed based on the balance between domestic 
production and the importation of foreign cigarettes in order not to raise the supplies of tobacco products to the domestic market in accordance with the FCTC and Viet Nam’s targets 
for implementation of the FCTC. 
E. How import prices are determined
 
 The import prices are determined by VINATABA on commercial considerations. They are 
normally calculated as follows: 
Import price = {[(C&F or CIF price + import duty) + excise tax] + VAT tax} 
+ other costs 
 Other costs include inspection fee, local transportation etc. WT/ACC/VNM/14/Add.2 
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 F. How the resale prices of imported products are determined
 
 The resale prices of imported products are determined on commercial considerations of 
VINATABA. The retail price of imports in the domestic market is calculated based on the wholesale price of domestic cigarettes and retaile r’s profit. The conditions on distribution of 
imported cigarettes are similar to those applied for domestic cigarettes. 
 VINATABA will borrow from commercial banks under normal conditions when it needs 
financial resources. 
G. Whether long-term contracts are negotiated by the State Trading Enterprise. Whether the 
State Trading Enterprise is used to fulfil c ontractual obligations entered into by the 
government  
 The negotiation and signing of long-term contracts for importing cigarettes will be 
implemented by VINATABA at its own discretion. It is not obliged to fulfil the Government’s contracts. 
H. Description of market structure: Information is not available
 
IV. Statistical Information  
1. Table I: Import information by product: Not available as now Viet Nam is still 
prohibiting import of cigarettes and cigars. 
2. Table II:  Export information by product: Information is not available. 
3. Table III:  Domestic activities  
Commodity 
(HS) Domestic 
purchase cost Domestic production 
(mil. of packs of 20 
cigarettes/pack) Turnover from 
selling in the 
domestic 
market 
(bil. VND) Domestic consumption 
(mil. of packs of 20 
cigarettes/pack) 
Cigarettes (2402.20.90) 0 2.423 6.220 4.5 
Notes:   
- The above statistics is of 2004; 
- Domestic purchase cost is 0 as VINATABA directly produces cigarettes; and 
- Domestic consumption consists of the cigarettes consumption of the whole industry and the estimated 
smuggling volume. 
V. Reason why no foreign trade has taken place  
 There have so far been several large tobacco groups in Viet Nam such as BAT, Philip Morris, 
Japan Tobacco, and Imperial etc. Production of cigarettes under foreign brands has been 
implemented under licensing contracts and the contracts for processing and cooperating in 
selling products in Viet Nam through Viet Na m-based international tobacco branches e.g. 
BAT (Viet Nam), Philip Morris (Viet Nam) a nd Japan Tobacco International (Viet Nam). 
 VINATABA is the local enterprise which large international tobacco firms have established 
business with and is the focal point of inte rnational cooperation of Viet Nam’s tobacco 
industry. Therefore, appointing VINATABA to be the sole importer of tobacco products also  WT/ACC/VNM/14/Add.2 
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 helps to stabilize the investment environment for international tobacco groups licensed to do 
business in Viet Nam. 
VI. Additional Information 
 None. 
VII. Statistics 
Year Commodity Domestic production 
(mil. of packs of 20 
cigarettes/pack) Imports by 
State Trading 
Enterprise Imports by other 
organizations 
2004 Cigarettes 4.130 0 0 
Notes:    
- Data on imports: none, as it is being prohibited from importing; and 
- Other tobacco products (excluding cigarettes) stated in Part B.I "Description of products affected" are now 
not being manufactured domestically: data on imports of these commodities is not available as they are 
being prohibited from importing. 
 
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