Restrictions on equipment imports delays FDI in Vietnam

MS Nokia FDI shift to VietnamUnder Circular No 20 which takes effect as of September 1, used machines and equipment will only be allowed to enter Vietnam if they have usage time of no more than five years and they are at least 80 percent brand-new.

In a document to the Ministry of Science and Technology and the Bac Ninh provincial People’s Committee in mid-August, Microsoft said their FDI has been interrupted because the machines being used at the factory in China cannot be imported to Vietnam.

Microsoft, after taking over Nokia in April, has decided that Nokia Vietnam will play a major role in Nokia’s global mobile-phone production chain.

It plans to shut down factories in Hungary and stop the operation of some units at factories in China, while the factory in Mexico will be turned into a repair center.

In a document to government agencies, Microsoft, while affirming that their equipment is all modern, proposed to exclude the equipment out of the scope of implementation of Circular No 20.

The group emphasized that the import of the used production lines serves Microsoft’s business strategy on restructuring its factories around the globe, and that it is not bringing production lines to Vietnam because they are out of date.

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Circular 20/2014/TT-BKHCN, Hanoi, 15 July 2014, Regulations for used machinery, equipment and technological line imports. Effective 1 Sep 2014.