(Tiểu luận FTU) REPORT FOR THE MID – TERM PROJECT

FOREIGN TRADE UNIVERSITY FACULTY OF ECONOMICS & INTERNATIONAL BUSINESS o0o REPORT FOR THE MID – TERM PROJECT Course : International Transaction Sale Instructor : Mrs Trần Hồng Ngân Group : Ha Noi, March 2018 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com TABLE OF CONTENT A INTRODUCTION B RESEARCH I MARKET RESEARCH Company Introduction Product Introduction The Domestic and International Steel Market II PARTNER RESEARCH China Chengtong Holding Group Ltd .8 Chentong International Limited .8 III VIETNAMESE REGULATIONS IN CUSTOMS FORMALITY 10 Importing License 10 Information needed for the declaration of imported goods (Customs clearance) 10 C CONCLUSION 12 D TASK EVALUTION 13 E REFERENCES 14 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com A INTRODUCTION Today globalization has initiated thousands of trade activities every day They are not simply the transactions between two people living in the same area, but the buying and selling activities that are beyond a country’s border International trade gives countries and global consumers the opportunity to be exposed to various markets and products at the reasonable prices Professional modern transactions help trade activities more accessible, still secured, while ensuring benefits for buyers and sellers Trading by commercial contract is one of the most significant procedure International trade contract is a legally binding agreement between two or more parties having the headquarters located from different countries, whereby the exporter (the seller) has the obligation to transfer the title of a certain property called as a good, the importer (the buyer) has the obligation to receive that good and to fulfil payment Thus, the most basic element in the contract is the agreement between parties among a number of clauses under the transaction Executing by negotiation, an agreement can establish, adjust or terminate the obligations of each party Attached with international trade contracts are considerable related documents to ensure a uniform legislation with the careful balance between the interests of each involved party In this assignment, based on the knowledge learned from the International Trade Transaction course, the group organizes an international trade transaction The import and export activities will be depicted between a Vietnamese enterprise, NGUYEN MINH STEEL GROUP JOINT STOCK COMPANY and a Chinese steel supplier, CHENGTONG INTERNATIONAL LIMITED The group will represent the former company to accomplish a transaction of importing materials for production After conducting a market research, the group will collect and analyze related documents to, therefore, executing the negotiation By accomplishing the stage of signing the contract, the implementation will be presented This report will mainly focus on the part of researching the market While the group’s video clip of negotiation and presentation will depict clearly how the sales contract is arranged and executed This is the great opportunity for the group members to understand and practice knowledge learned into the actual work, specifically in forming and LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com implementing international contracts There might be mistakes and misunderstandings occur within the group assignment Therefore, we would appreciate any feedback from the lecturer and other classmates in order to comprehend our work and build a solid foundation in International Trade Transaction LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com B RESEARCH I MARKET RESEARCH Company Introduction Nguyen Minh Steel Producing and Trading Co., LTD (NMI Steel) is specialized in manufacturing and trading steel and iron products for construction and consumer other uses Established in 1999, the company now has two factories located in Ho Chi Minh City and Long An Province The company offers a variety of steel products with annual production capacity that can respond to and accommodate a wide range of demand: Hot rolled and cold rolled pipes in shapes of customers’ preferences Its production lines are 300,000 ton/year  Zinc-coated galvanized pipes (GI) with a purity ranging from Z60-Z275 and the quantity product of 50,000 ton/year  Cold rolled steel coils and strips have the production of 250,000 ton/year with widths ranging from 450mm-650mm and thickness ranging from 0.4mm3.0mm  Zinc-coated galvanized coils and strips ranging from 450mm-650mm in width and 0.7mm-3.5mm in thickness The company has produced 120,000 ton of Zinc-coated galvanized coils & strips per year  Stainless steel pipes – INOX has the production capacity of 15,000 ton per year, while Cut-to-length steel plates have the production capacity of 50,000 ton per year  A national and international network of representatives and agencies, along with the variety of product categories, NMI Steel continues to gain credibility among its global customers In order to sustain reputation and compete in the industry, machinery and other advanced technology for production are consistently upgraded With the committed standard being experienced by trusted customers, the company’s products have been supplied to many other construction works and uses around the country and some regional NMI Steel maintains to be a dominant exporter to the United States, Australia, Thailand, Malaysia, Bangladesh, Indonesia, Laos, and Cambodia Product Introduction LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com In order to maintain the annual production capacity mentioned above, the company decided to import the commodity named Prime hot dip galvanized steel sheet in coil, with the quantity of approximately 3500MT In details, the grade of steel needed is SGCC JIS G3302 regular spangle; the zinc coating is no less than Z60 with the tolerance of +/-0.02MM Hot dip galvanized steel (HDG) is the product that combines the strength and formability of steel and the corrosion resistance of zinc The steel is embedded in molten zinc to form a rust-resistant coating Hot dip galvanized steel has a unique crystal steel configuration on the surface When exposed to air, zinc reacts with oxygen, water, and carbon dioxide to form a relatively stable zinc carbonate (ZnCO3) layer The zinc surface will slow down the oxidation of iron, which can protect steel for a long time Hot dip galvanized steel is commonly used in outdoor steel applications, subjected to direct weather effects HDG is used in a wide range of applications such as structural steel girder, roofing, bolts, steel pipes, electric ladders, and grates Hot dip galvanized steel has a relatively long lifespan, over 50 years in normal environmental conditions However, in areas which are exposed to seawater, mechanical abrasion agents, acids, or other extreme conditions, the hot dip galvanized steel might easily lose its zinc coating The investment cost for hot dip galvanized steel is much lower than for stainless steel Therefore, it becomes one of the most sought-after household appliances, interior construction materials The Domestic and International Steel Market The steel supply is continuously increasing In 2015, Vietnam’s production of steel products rose by 21.54% The total domestic consumption increased 28.02% in comparison with 2014 (Vietnam Steel Association, 2016) The scene for steel consumption in 2016 was forecasted to increase, with the rate of more than 20% The General Department of Customs stated that the volume of steel semifinished and finished products for export tended to decrease, but the speed was small In general, the circumstance was stable The above statistics on the steel industry is relatively beneficial to the company in order to maintain the current production and business China is the major steel supplier for Vietnam The price offered is often lower than other suppliers around the world According to statistics of the LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com General Department of Customs, by the end of December 2015, the amount of iron and steel imported into Vietnam from China in 2015 was 9.6 million tons, accounted for 61.3% of total imports of this country; with a value of 1.32 billion USD (which was 28.57% higher than the same period last year) The figure collected from the Center for Industry and Trade Information (Ministry of Industry and Trade) has shown that, in the first two quarters of 2016, the total quantity of steel imported from China was accounted for 55.1% Japan, South Korea, and Taiwan are the three other steel exporter with the supplied proportion of 14.6%, 12.8% and 8.9% respectively (Ministry of Industry and Trade, 2016) The main reason for the excess in low-price Chinese steel is that China has applied steel export to other countries in the context of excess supply and weak domestic consumption The yuan devaluation policy is recently executed to support exports In addition, the European Union has imposed anti-dumping duty on cold rolled stainless steel imported from China with tariffs at more than 24% also resulted in the increase in export to Vietnam In addition, the geographical distance between Vietnam and China is favorable for shipment The time travel from any ports in China to Ho Chi Minh City port varies from three to ten days, which is considerably shorter than that of Korea or Japan NMI Steel can have needed materials in short time and start the further production straightaway This will benefit both the company’s manufacturing as well as the prompt accommodation with orders from customers Vietnam regulations for importing goods as raw materials for the further process should also be mentioned Since manufacturing Prime hot dip galvanized steel sheet in coils for export purpose, NMI Steel is free from an obligation to disburse the anti-dumping tax and value-added tax This regulation is stated in the XN210 Moreover, the good is listed in the appendix of Circular 58/2015/TTLT-BCT-BKHCN, thus, it does not need a quality inspection during customs clearance This will help create a prompt procedure Above information are advantages for Vietnamese companies as NMI Steel to import the needed Prime hot dip galvanized steel sheet in coils as raw materials By using the company’s current machinery and process, NMI Steel assures to manufacture qualified products that are appropriate for export Hence, NMI Steel needs to find a reputed enterprise that has high-quality products with competitive price among the Chinese enterprises to accomplish the purchase LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com II PARTNER RESEARCH China Chengtong Holding Group Ltd China Chengtong Holdings Group Ltd (China Chengtong) is a large enterprise group under the supervision of the State-owned Assets Supervision and Administration Commission (SASAC) of the State Council, with total assets of RMB 55 billion It was a board-of-directors pilot for wholly state-owned companies founded and completed by the State-owned Assets Supervision and Administration Commission in the first batch It also was a pilot for the companies operating state-owned assets The main businesses of China Chengtong are assets management, integrated logistics service, capital goods trade as well as production, development, and exploitation concerning forestry, pulp and paper The group's business also covers prompt goods wholesale market, tourism, cultural and packaging industries At present, China Chengtong owns more than one hundred subsidiary companies all over China, among which, are listed companies such as Chentong International Limited, Zhong Chu Development Stock Co., Ltd., Foshan Huaxin Packaging Co., Ltd, China Chengtong Development Co., Ltd., Guangdong Guanhao High-Tech Co., Ltd., and Yueyang Forest & Paper Co., Ltd Besides, it also has set up overseas business platforms in Russia and other areas Now, it is focused on developing advantageous businesses and further expanding the capital market In recent years, China Chengtong, as an important platform for the Stateowned Assets Supervision and Administration Commission to advance the layout, restructuring and strategic reshuffling of central enterprises, has made remarkable achievements in terms of enterprise restructuring, business integration, and asset disposal It is involved in industry consolidation, nonperforming assets disposal, corporate restructuring, corporate trusteeship, etc and has played a positive role in the reshuffling and integration of central enterprises and won the high praise from all circles of the society Chentong International Limited  Type: Private company limited by shares  Address: Room 2105, HZ2486, Trend Center, 29 – 31 Cheung Lee Street, Chai Wan, Hong Kong  Incorporation date: 24 January 2014 LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com  Register capital: 100 million RMB  Business sectors No Business sectors Main products Import and export As a professional steel distributor, Chengtong International Co, Ltd follows the customerfocused principle and pay attention to the development of the overseas market network Products are mainly sold to Korea, Vietnam, Brazil, Africa and Central & South America market Steel products Hot rolled, Cold rolled, Beams, Galvanized sheets, Plates, Cold rolled coil, Hot rolled coil, Wire rod, Rebar, Strip steel, Stainless steel, and Billets Chemical products Petrochemical Products PET Products: polyester yarn Polyester raw materials Rubber Products: natural rubber, compound rubber, synthetic rubber, latex and mixed alcohol products Non – products ferrous Copper, Aluminum, Zinc, Silvers Rubber products (Focusing on end customers' needs, providing non-ferrous products distribution service and engage in finished products export.) Natural rubber, Compound rubber, Synthetic rubber, Latex and mixed alcohol products  The reputation - As a subsidiary of state-owned China Chengtong Holding Group Ltd, China Chengtong International Co.,Ltd is a large circulation enterprise in bulk commodity import & export LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - Chengtong International Ltd has established a long-term partnership with famous domestic production, logistics and trade enterprises to set up rational marketing network and logistics system  Conclusion: Chengtong International Limited is a reputable company with the high-quality products, and important long-term partnership III VIETNAMESE REGULATIONS IN CUSTOMS FORMALITY Importing License Imported steel is categorized under the license and subject to the specialized management of the Ministry of Industry and Trade Placed as good which is applying automatic import licensing The Import and Export Bureau of the Ministry of Industry and Trade shall grant automatic import licenses in the form of certification of import registration applications for each goods lot The validation of the certification is 30 days Nguyen Minh Steel Producing and Trading Co., LTD, which has been operating since 2011, has the business license number 1101359647 for iron and steel production The company has registered for a trader profile After registering online at http://www.nhapkhau.gov.vn and being approved, the company will have to come to the licensing office to present relevant documents The needed documents to obtain the license are the printed application form, sales contract, commercial invoice, letter of credit, and bill of lading The licensing office in this instance is Ho Chi Minh City office of the Import and Export Bureau of the Ministry of Industry and Trade Information needed for the declaration of imported goods (Customs clearance) Customs clearance for commodity HS: 72104912, which are flat-rolled products of iron or non-alloy steel, with a width of 600 mm or more, coated, galvanized or zinc coated of a thickness not exceeding 1.2 mm Imported under clause 12, Decree 134/2016 / ND/CP (valid from 01 September 2016) As well, the good that NMI Steel planned to import is categorized as followed: - The commodity is categorized under Type E31 (Imported raw materials for export) - The number of the representative goods in the declaration is 7210 - Refer to the Commodity under Section XVI - Refer to Chapter 72 on Iron and steel LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com - Group categorized 7210 - Having a separate management code for goods processed for export From September 2016, galvanized steel including steel code HS 7210.49.12 is subject to the anti-dumping tariff in accordance with Decision No 3584/QD-BCT However, the company imports the commodity as raw material for further process to export, NMI Steel is exempted from anti-dumping tax and value added tax according to XN210 In addition, the goods are not subject to have a quality inspection during customs clearance because they are categorized in the appendix of Circular 58/2015/TTLT-BCT-BKHCN After transmitting the declaration form, the e-customs shall return the lot to the red line (3C) The customs official checks the related documents and examines the actual 5% of the consignment at the port while executing the customs clearance LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com C CONCLUSION In conclusion, through the project of the international contract for the sale of goods, the team collected and analyzed related documents to, therefore, executing the negotiation Keeping track of the content of the International Business Transactions course and adding additional knowledge of the subject As we all know, in the increasingly competitive economic climate, every contract needs to be carefully considered for each condition as well as the relevance of the documents In-depth knowledge of contracts is essential, especially for import-export staff and related industries as well as for importexport companies Because it affects the protection of your rights The research team would like to thank Mrs Tran Hong Ngan - lecturer in International Business, Faculty of Economics and International Business, who has guided the group in the research The process of analysis is inevitable, so the team is looking forward to receiving comments from the teacher to improve our performance We sincerely thank you! D LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com D TASK EVALUTION LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com E REFERENCES International Trade Transaction Textbook, Foreign Trade University, Editor: Assoc Pham Duy Lien The Uniform Customs and Practice for Documentary Credits UCP600- 2011 Circular No 22/2014 / TT-BTC Stipulating e-customs procedures for commercial import and export goods Decree No 187/2013 / ND-CP Guiding the Commercial Law on international commodity purchase and sale Decision No 3584 / QD-BCT on the decision to apply provisional anti-dumping measures Decree No 134/2016 / ND-CP guiding the Law on Export Tax and Import Tax Vietnam Steel Association, January 2017, 2016: Thép Trung Quốc chiếm 50% thị phần nhập Việt Nam [online] available at: http://vsa.com.vn/2016-thep-trung-quoc-chiem-hon-50-thi-phan-nhap-khau-cuaviet-nam/ VLXD.org, March 2016. Tổng quan thị trường thép Việt Nam năm 2015, dự báo cho năm 2016 - Vật liệu xây dựng Việt Nam [online] available at: http://vatlieuxaydung.org.vn/vlxd-co-ban/sat-thep/tong-quan-thi-truong-thep-viet-namnam-2015-du-bao-cho-nam-2016-6706.htm Cctgm.com. China chengtong international co.,ltd [online] available at: http://www.cctgm.com/en/about.php Cctgroup.com.cn. China, ChengTong [online] http://www.cctgroup.com.cn/EN/c_0000001600010003 available at: LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com CONTRACT AND RELATED DOCUMENTS LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com LUAN VAN CHAT LUONG download : add luanvanchat@agmail.com ... through the project of the international contract for the sale of goods, the team collected and analyzed related documents to, therefore, executing the negotiation Keeping track of the content of the. .. to, therefore, executing the negotiation By accomplishing the stage of signing the contract, the implementation will be presented This report will mainly focus on the part of researching the. .. clearance because they are categorized in the appendix of Circular 58/2015/TTLT-BCT-BKHCN After transmitting the declaration form, the e-customs shall return the lot to the red line (3C) The customs